Hey Dylan, long time no see.
Citibank...they are a strange beast. I work with a lady who had a Diamond Preferred MasterCard and she too received a Thank You card out of the blue. This was the basic Thank You card (light blue) that is no longer offered. She recently was given a new Thank You Preferred card with the "silver chip."
The main reason for the upgrade from Diamond Preferred to Thank You Preferred is likely Citibank's way of trying to tempt you into utilizing your card; they figure the Diamond Preferred was not working for you so they thought to send you a Thank You card instead hoping you would use it more. I would suggest making a nominal purchase on your cards every 3-6 months to keep them active.
Your existing Thank You Preferred Visa was upgraded to Visa Signature because the higher level Visa card that you use (classic->Gold->Platinum->Signature) the higher swipe fee Citibank collects from the merchants when you use your card. You may have noticed that for the most part, banks and even credit unions are trying to issue World MasterCards, World Elite MasterCards and Visa Signature cards wherever possible on their reward cards because the swipe fee helps them earn more money to cover the rewards etc. For you, Visa Signature means you have some added benefits including concierge.
As far as the "silver chip" this is called EMV. I won't bore you with the details, but the rest of the free world (and even war torn nations like the Ivory Coast) use these EMV cards instead of magstripe cards like we have here. EMV cards, also known as Chip + PIN have proven to nearly eliminate counterfeit cards and stolen cards (pickpocket etc). Essentially, you would place the card, chip first into an EMV point of sale system. The card stays in there, the chip then approves the sale. In all other countries, you would enter a 4 digit PIN to complete the sale instead of signing. However, since the good ol US of A has to be different...we will follow these steps but will sign a receipt as we do now instead of entering a PIN. Citibank has been the frontrunner in getting almost all of their cards with EMV chips in the US. There is a liability shift in fraud coming in October 2015 that essentially states that if a cardholder has an EMV card and the card was used fraudulently at a retailer that did not accept EMV payments the retailer is held liable-right now, the bank is liable. Vice versa, if a ghetto bank or credit union has not issued an EMV card and it is used fraudulently at a merchant that DOES have EMV readable machines, the bank is liable. So, basically, as an insurance policy the major credit card issuers and the major coast-to-coast national chains are likely going to be ready with EMV by October 2015. So expect most of your cards to start coming with the "silver chip" soon.
I am providing a link to Citibank's "EMV chip technology" website. They even have a video of a man and a woman using their chip cards. I don't doubt that Credit Card Guru (the moderator here) will delete my link. To find it on your own you can go to Citicards.com, click a card with a chip and look for Chip Technology as one of the benefits, it will take you to the website:https://www.citi.com/credit-cards/template.do?ID=chip-technology