Sure it is. It's still assumed that the great majority will follow the rules and post honest scores, and the few who try to abuse the system have at least a slightly better chance of being found out. No guarantees - even when we had to return cards, cheaters found a way around it at clubs where the handicap committee was not very proactive.
The handicap system isn't designed to rate players anyway. It's function is to provide a more or less level playing field for competition among players of differing abilities. If you return honestly reported qualifying scores, your handicap will still be accurate, even if the total number isn't as great. The only time when it will really affect anything is during periods of improvement or decline, when it will take more time for the changes to become apparent.
In most of Europe, handicap eligible scores can only be returned from competitions or sanctioned rounds. Here in the US for the moment at least, we are still being trusted to return only those scores which conform to the new policies, but we can still use scores from casual play as long as we play with at least one other person.
I think its more for the cleaner look, I use a blue line on my ball, and sometimes the sight of that bugs me on my approach shot, but it helps my putting so I'm not about to remove it.
It is ultimately your responsibility to make sure you are hitting your own ball. It doesn't matter if I am the only one in the fairway, I still take a look to make sure it is my ball, you can never be too sure!
The tournament I played in this past weekend, one of the pros incurred a penalty for hitting the wrong ball. It was a bad situation because there were spotters/markers marking the balls from the different holes and the marker told the guy that was his ball. He still should have looked and it is now a lesson learned, but kind of sucked that the marker told him it was his, and it ended up not being his.
I started putting a line above and below the brand of ball *titleist, wilson, callaway* and drawing a line either all the way or halfway around the ball through they alignment marking/model name as well. It makes it much easier to identify the ball regardless of it's orientation in the rough. Sometimes I vary a bit in the mark on/near the label but I almost always have the a line around the ball. The line is dual purpose, it's great for a quick reassurance that the ball is mine as well as helping me a little with lining up putts and tee shots. Ever since I started doing this I've not had any incidents of wrong ball being hit by myself or a playing partner.