1. The cost of the physical card is a small part of the picture. The issuer's card database would need to be tied into the Chip & PIN authorization networks in parallel with the existing magnetic stripe authorization system.
There's an alternate solution, dunno if it would cost less:
If the credit card issuer has a division/partner/whatever overseas that already issues chip&pin cards there, then the alternate way would be for the credit card issuer to have that overseas division/partner/whatever issue the chip & pin card, but make it billable to you in the US.
One way to do that: All charges made using account xxxx xxxx xxxx 1234 (the European card) are actually posted to account xxxx xxxx xxxx 5678 (from a US bank).
Cross-charging already happens, for example, in some cases where one card is cancelled and replaced with another, but charges authorized prior to the cancellation are allowed and are posted to the new card. Of course, in that case, both accounts are in the same country. But to the lay person, it seems it's at least halfway there already...