Perhaps they can do it like this now because the cover will be made of Sapphire.
This was my first thought when I saw the pics.
That said, I don't claim to know the physical properties of sapphire, i.e., tensile strength vs. compressive strength, or any other factor other than just hardness (which I've read is second only to diamond) that would make it desirable for larger screen sizes. Harder tends to equal more brittle, a quality that becomes more troublesome the larger a thin sheet of it is cut to. If there is a way to cross-laminate substrates in some fashion that the crystalline structure of a thin sheet of sapphire can be made more robust, then great.
I doubt Apple would release a more brittle, more easily damaged screen, so if this display is sapphire or some sapphire laminate, I'm reasonably sure they would have worked out the engineering to make it durable. And if that is a new component of the iPad Air, cool.
Also, conspiracy theorists worried about TouchID giving them away are, to use a biblical metaphor, "straining at a gnat while swallowing a camel." There are so many other easier ways for the intelligence community to find you that they wouldn't even bother with TouchID. Apple did not make a flawless, unbreakable ID system: they just made it sufficiently difficult as not to be worth it. A quick glance at your computer's web surfing history or emails via your ISP would be simple to obtain. Unless you're going full-on tech-dark Amish, they'll have no trouble locating you, and precious few Amish own iPhones.
Oh, and one more thing... it seems to me that conspiracy theorists worried about TouchID suffer from the malady of self-aggrandizement. The NSA doesn't know who you are or where you live because they DON'T CARE. You aren't important enough to pique their interest. The second you would ever become remotely interesting to them they would know everything they need to know in minutes with no help from Apple. Sadly, the NSA, the FBI and the CIA are "just not that 'into' you."