That's exactly what happened with mine. It eventually wore down to bare metal.
Apple replaced both the iPad and smart cover. I've added moleskin to the part of the cover that touches the iPad just to be safe.
Out of curiosity, how do you carry it with you? I'm starting to wonder if it's not an effect of the case I use - a cheap neoprene sleeve that holds it fairly tightly - I figure it might allow enough flexing/rubbing in my bag to cause the wear.
My iPad has only left the house once and that was on a vacation and I just carried it around. No case for me.