The card contains a system on a chip. A terminal would not have access to files on the chip. The terminal can comunicate with the system on a chip and provide electrical power to the system on a chip. The terminal would NOT have access to the wallet.dat. The SoC on the card would sign the transaction by itself. The terminal would only be used to provide access to the blockchain for the SoC and for the customer to see the transaction ammount and type in the pin. It would only act as an gateway, it would only "see" the already signed transaction passing through.

The main issues with such cards would be that the producer of the SoC would need the wallet.dat during manufacturing (like they also need the private security tokens when they produce regular chip protected electronic cash cards for regular banking accounts). So you would need to find a trustworthy producer.
Second issue would be that Bitcoin transactions need confirmations, it would just take to long to wait for 3 or 6 confirmations when you just want to pay for something in a supermarket.