Securing Data

I was just reading AGAIN about the loss of personal data by a government contractor who copied the data to a USB stick and then lost it. What I don't understand is the amount of lethargy the government and others have had when it comes to understanding 2 things: 1) Security sensitive data is NOT the same as data in normal unimportant documents like many email etc and should not be treated thus and 2) It will NEVER be enough to rely on people following procedures to ensure safety or security in ANY scenario, let alone one that involves people's actual identity.
Security sensitive data (SSD) is treated like most data. It is stored in a database, many of which can't distinguish between someones bank details and their favourite colour. It is then possible to back it up to file, move it between computers, send it to external drives and in some cases read it physically from the disk with no encryption to break. What is needed is simply a linking up of various software vendors to agree on a new type of data in software systems and databases. This data will always be encrypted and can be forceably restricted to, for instance, only be allowed to live on a nominated server(s) and not be allowed to be copied onto an external drive. This would be defined by the person who creates the data so that even if it is sent to an external contractor, the safeguards would not be able to be removed (although presumably if the contractor wanted to copy the data off the screen somehow into another document that would be possible). Sure it would be quite a bit of work but with the amount of investment in these large systems and the potential cost of information loss, you would think that the powers that be would have finished this by now. This also mitigates the second point which is for one reason or another, people don't always follow a process, either at all, or 100% correctly. Somebody is covering for someone else's job, a new starter doesn't understand the ropes, communication is misunderstood, costs are cut etc, etc. By securing the data itself in a way that is coherent across platforms, peope don't have to remember not to write it to CD because the data will not let them do it. With basic tools like mandatory encryption and password protection, even if the data is mislaid, the chances of it being useful are very slim.
Come on everyone - sort it out!!