I didn't mean for it to sound like I would pick up the iPad by the cover only. I meant that it seems like it is possible that when one picks up the iPad the fingers on the bottom of the iPad could slip off and then the only you have a grip on is the cover. Lets face it the brushed aluminum backing of the iPad does not have the most grip in the world. It is hard to explain without actually showing what I mean. Maybe I'll post a video up on YouTube.
EDIT: Never mind not going to make a video because I don't have a smart cover to demonstrate with. Oh well.
Unless you ONLY grab the smartcover, it isn't going to slip off. if you have firmly grabbed the iPad (i.e. pinched in hand with fingers on the back, thumb on the smartcover on the front) it isn't going to slip off. It stays in place pretty well.
If you're fingers slip off the back, then yeah you're going to drop it--but that's true of any case as you can't hold anything by only touching the top unless you're Spider-man!
But yeah, if you want drop protection, then you need something thicker that covers the whole thing.