This is an interesting topic, because there are some serious issues involved with tokenizing real estate. You kind of already pointed it out, but a key issue with tokenizing land is regional governments.
Blockchain was meant to change financial sovereignty from governments back to individuals in the way economics use to be back when everything was based on gold and other precious metals. Most of us in crypto are in crypto because we view this as a human right.
Land is a very different story. Governments will struggle to control cryptocurrencies, but tokenized real estate would be pretty easy to control and regulate. You can tokenize it all you want, but the local government will easily be able to ignore your rights and physically prevent you from enjoying the use of that land.
For this reason, tokenized real estate will probably happen but be completely regulated and controlled by the government of that specific location. There will likely be many limitations put on international trading of land, and so render real estate tokens nothing more than an effective deed for the land. Useful, but not a mind-blowing accomplishment.
I do believe there are benefits, but I am not as excited by security tokens (which I believe ought to be called tokenized securities to be accurate) as some are. The reason is that tokenization of gold, silver, property, corporate stocks and bonds does solve some issues, but those issues are relatively minor problems. The real ground-breaking achievement of tokens is giving a sense of material substance of non-material things such as data and digital products, and also to empower the lower and middle incomes to participate in exciting new things.
A perfect example of a good use for tokens is in books. The @hobo.media project aims to tokenize e-books and e-magazines. You can learn more about that here:
Proof of Book: Collect Book Tokens!
Now, as for great uses for tokens attached to physical items, while things like gold and real estate are not things I think work well, what I think are great uses are cars, boats, airplanes, gym keys, or any kind of key, club memberships such as tokens on shared items like high priced dresses, jewelry, tuxedos and sports event tickets.
Tokens should be very useful in real estate for things like time-shares, but again, my concern is actual ownership, because governments will definitely get in the way. For example, foreigners cannot have 100% ownership of a property or business in the Philippines, and that reduces the usefulness of having an international token in the marketplace.