If it uses a proximity system I'm thinking that the information could be copied from a quite a range with the appropriate reciever (as they have so you don't need to put your window down to wave your card when stopped to drive through gates).

I too was quite suprised to find that the chip wasn't part of the back cover. I've taken a picture here of the new passport chip page if you haven't seen it.

Do any other countries have these chips in their newly issued passports ?