Well indeed the military and not just them have invested a lot in such radio technology.
An RFID reader is very similar to a radar. There are 2 important classes of radar and both type kind of apply:
1) primary radars: blast a lot of energy as radio waves towards a target, the target reflects some of the energy in the radar's direction with is then received and amplified (big antenna, amplifiers and signal processing)
2) secondary radars: send signals to a cooperative transponder on plane the transponder (which has batteries) decodes the signal and transmits a response back. The radar then receives and decodes the message.
If you combine both types of systems for RFID long distance reading you can:
- beam energy to the RFID over a long distance (antenna with narrow beam, emit kilowatts of power with appropriate characteristics to provide power to RFID tag). Primary radars can send megawatts in beams that have a 1 degree width
- send signal/message over long distance to get the RFID to respond
- receive RFID response thanks to highly sensitive receivers (primary radars have required a lot of work in that area since the targets don't cooperate and might even use stealth technology). Primary radars can typically receive picowatts of energy and recognize the target.
If you add this all together, you can track RFID tags miles away and know where they are with some precision (100 feet maybe).
Also, criminals may really like RFID too: Kidnapping mafia in poor countries could detect passports in cars going on a road, kidnap all Americans (or Europeans) as they are likely to bring a good ransom. Apparently the equipment to do that is dirt cheap. And the security of the RFID tags is lame as there were people who managed to clone RFID tags of passport and such. And if your passport were secure you might still have kept the tag on your bible, DVD, laptop etc.
Overall, I am not surprised that even Skymall sells wallets that block RFID...
Of course, one can argue that cell phones are much worse. So you might need quite a bit of tinfoil in the coming years...