[marshray]

The card's generally blocked after a set number of incorrect attempts anyway, so it's not as if it could be used anywhere else.

Remember, credit cards originated before there was universal ubiquitous connectivity. It's still no guarantee (think of a small merchant at some outdoor festival). EMV (Chip and PIN) cards have an offline mode which an bad guy can use. http://www.cl.cam.ac.uk/~mkb23/interceptor/

ATMs that keep your card for the duration of the transaction only serve to decrease trust in the mechanism.

In the past, there were modes that allowed you to overdraw your account with an ATM. I imagine this was done in consideration for unreliable communications links or banks that needed downtime in their account balances for batch transaction processing.

"Trust" is a deep and strange concept, but at the end of the day US ATM cards are only a mag stripe and a 4-digit PIN. We'd best not expect too much from them. :-)