The reason simple identity is not "better", and the whole reason these libraries and React's virtual DOM exist, is that the DOM is stateful.
This approach works for simple stuff, until it doesn't. Form inputs will lose values, focus will be lost (ruining accessibility in the process), videos will restart, etc. You need the diffing to prevent unnecessary changes to the DOM. Even worse, in complex applications you easily end up in situations where the trivial approach causes vast swathes of the page to rerender at once, either because of unplanned dependencies or simply because you have three, seven or forty teams working on the site at the same time.
This approach works for simple stuff, until it doesn't. Form inputs will lose values, focus will be lost (ruining accessibility in the process), videos will restart, etc. You need the diffing to prevent unnecessary changes to the DOM. Even worse, in complex applications you easily end up in situations where the trivial approach causes vast swathes of the page to rerender at once, either because of unplanned dependencies or simply because you have three, seven or forty teams working on the site at the same time.