You're right in saying it's always passed, but it's not quite that simple, actually. The caller-ID box at the end of the line isn't responsible for, and doesn't, block out the caller ID. Actually, there's a lot more smarts built in to the front end of the system than most laypeople really think about.
When you pick up your phone and dial, your PHONE isn't sending any data to anyone. At the other end of the wire, the telephone company sees your line go "off hook", gives you dial tone, and waits for you to dial. Whatever it is you dial, your local phone service provider goes to work on it, and the telephone switch your phone is connected to is really doing ALL the work. It looks up your number in a database and determines what features you have, like caller-ID blocking. It looks at the number you dialed. If it's long distance, it looks in the database and determines who your default LD carrier is, and forwards the call on to them. Through the call set-up with the LD carrier, the LD carrier must know your number (so they can bill you) but that is not the same thing as your caller-ID info being sent. The LD carrier has access to several data streams from the local carrier including ANI and DNIS. If the LD company wants to be "poopy butts" about it, they could take the ANI info that they get during call set up and repopulate any empty fields in the caller ID info as the call is being handed off to the far-end local carrier. (Which sounds like what MCI is doing with credit cards.) It is really up to your LD carrier, and the far-end local provider that serves your call's destination phone to help honor your blocked ID request.
If your call is to 911 or a toll-free number, your ANI info (essentially your caller ID) cannot be supressed and has to be passed along.
All these decisions--when caller ID is sent or blocked, which service provider the call is passed on to, whether it goes to your default intrastate or interstate LD provider, etc... All these decisions are being made by your local telephone switch based on your record in the switch database.
I suspect that MCI is responding to complaints about cards being used to conceal identity, which really is illegal most of the time. Caller-ID blocked or not, the receiving party of any call has a legal right to know who's calling, and this has been reinforced with stiff penalties in the new FTC telemarketing regulations. The purpose of calling cards is to simplify the financial transaction and mitigate credit risk, not to create confidentiality, so the transgression that it appears MCI is making is not as bad as it may look to all of us who, well, were benefiting from the coincidental confidentiality while it lasted.