There's one thing that's always puzzled me: why not integrate the PIN input buttons on the card? It's not like we can't create flat electronic contact buttons that can be built into the card (e.g. low precision touch panels - they're cheap since they don't have to be transparent; I imagine something like this), and the processing isn't that demanding. Power for the buttons could be provided by the contact with the main reader / terminal (just as for the chip) and some sort of CHAP would assure the PIN never travels on the wire. The cards would be slightly more expensive but the security would be significantly improved.
Alternatively, why don't cell phones serve the same purpose? This input method or processor could be secured with the SIM PIN, which doesn't ever leave the device, and CPUs in cell phones can do serious cryptography (not very fast but it doesn't need to be). This would work perfectly as long as the contact with the terminal is electrical (not wireless - history shows wireless is just too problematic for this purpose).
These sound like technical solutions to social problems, don't they? :)
#1 Outside of the box
I really like this outside of the box thinking.