This article made me realize that the whole concept of keys is something that needs to be looked into quite a bit with the rise in 3D printing technology. With an excellent 3D printer, one would hypothetically be able to take a picture of keys and be able to print a copy of them.
Physical locks are not that resistant to attack to start with. A $20 lockpick set in the hands of someone who has put in less than 100 hours of training can open up almost any door or padlock in a matter of seconds.
Have you seen how fast and easy it can be with bumpkeys? It isn't nearly as versatile, but a ring of properly made bumpkeys can open the majority of locks.
I don't see why this would invalidate the concept of physical keys.
The problem of visual key copying can be easily solved by either making keys in a shape that doesn't allow to see the ridges easily (something like 'E' with middle bar being the actual key) or by making a "dynamic" key that changes shape after you insert it into the lock.
I think you'll have better luck adapting lock technology to user behavior than changing every user's behavior.
Good password selection thinking should be commonsense by now to people who post here, but it seems like there's still a lot of work to be done educating the general (less geeky) public.
I don't have any inside knowledge, but presumably the keys and car exchange messages and do some crypto signing.
For example, the car makes up and sends a random string, the key signs it and sends it back.