Chips have been present in passports, even the all-paper ones, since the 1990s, with all the same information. They’re called “Biometric Passports”. The plastic card in newer passports is for durability and making them more difficult to forge.

But the chip doesn’t contain “everything that matters”. The chips have biometric info (hence the name) like legal name, sex, nationality, photos, and sometimes fingerprints. But the bulk of a passport book is made up of tens of pages where stamps, stickers, and even entire visa documents can be stapled/attached. None of these are present in the chip.