Can we make something like chip reader, which can understand chip design and generate blueprint of it?
ChipWorks has an excellent blog about doing exactly this, with lots of great pictures here.
FlyLogic also has an excellent blog. It is here.
The short answer is it is absolutely possible. IC DIEs are basically really small circuit boards. You can reverse engineer them pretty easily, it just takes a different tool set.
Yes. There are companies out there that specialize in this. This is done all the time, although it's more of an art than a science. Usually they do some wacky chemical and mechanical etching process to progressively strips off the layers of the chip (like the layers of a PCB)-- taking detailed photos of each layer. Normally, these companies do it to help people like T.I. and Intel figure out why their own chips are failing, but you can bet that there is some illegal uses of this too.
Here's an interesting and relevant article that I just ran across: http://www.forbes.com/forbes/2005/0328/068.html
And another link: http://www.siliconinvestigations.com/ref/ref.htm
Another way to copy a chip design is to emulate its functionality using an FPGA. Many emulations of older chips like the Z80 and 6502 are available. Some students even produced their own version of an ARM device and made it available via the Web, but had to delete it when ARM threatened legal action.
While reverse engineering of old microchips is feasible with an optical microscope and manual polishing, the challenge is to cleanly strip off layers. For instance, the above picture appears to be an older chip and from the color changes in the background you can see that it has been polished to remove a layer. Typical deprocessing processes involve polishing with specialized polishing/lapping machines or wet chemical etching with more or less dangerous chemicals.
However, for more recent chips the process sizes are so small that you will need sophisticated and more expensive equipment such as a plasma etcher, a Scanning Electron Microscope (SEM) or a Focused Ion Beam (FIB). Due to the complexity it is also no longer that easy to extract logic (i.e., the netlist information) from the chip. Today, companies thus use automated tools that typically process the obtained SEM images of chip layers to generate the netlist. The challenge here is deprocess the chip so that deprocessing artifacts are avoided as they would be problematic for any subsequent automated analysis.
There are some Youtube videos and conference talks on chip reverse engineering. For instance, in the video here you can see a smaller setup that people could use even at home: https://www.youtube.com/watch?v=r8Vq5NV4Ens
On the other hand, there are companies that can do this kind of work with more sophisticated and expensive equipment. In addition to the above mentioned, IOActive has a lab for this kind of work.
In the EU there are also companies. For instance on the Trustworks website, you can see a few pictures and some of the necessary lab tools to do this kind of work: https://www.trustworks.at/microchipsecurity. They also appear to have microchip reverse engineering software tools if you specifically look at their "Netlist Extraction and Analysis" section.