Yes and no. And verifying by domain is better, especially for people who are likely to be impersonated (ex. Journalists).
Rel="me" doesn't actually verify a user's identity, it verifies that a user has a relationship with a website. The problem is that you need to leave Mastodon to make sure that the website actually verifies their identity. I've verified a connection between a Mastodon and Pixelfed account, for example, but it doesn't tell you anything about who I am. It's also much easier to spoof a website than it is to get the BBC to give you an account on their private instance.
It really works great the other way though! If you have a known identity here, you can be sure that the linked sites are legit.
Meh. Sounds like a bunch of tankie bullshit.