This apparently happened in Denver although it's the first I've heard of it:
BoingBoing: Woman charged for refusing to show ID on a public bus.
Having been in the military I probably would have shown my ID before really thinking about it. Old habits and such. As I recall Lowry AFB in Denver had a road that passed through it that city busses would drive down. This was many years back, but I'm pretty sure there was a sign at each gate that informed the passengers that they could not leave the bus while it was on the government property without proper military ID. As the bus came in the gate an MP would board, ask the passengers if anyone would be getting off and, if so, to present their IDs. That was it. Nobody not in the military had to worry about it.
What happened to this woman just seems very, very wrong and I'll be very interested in the outcome of the case.