It does get absorbed systemically, although (supposedly) minimally. I got put on the stuff right before it came to market, and my dermatologist said one of the best things about the drug is that it is a large molecule that does not permeate past the skin easily.
Apparently, T-cells are in the skin and presumed to be acted on by the protopic, but doctors are not sure exactly what the mechanism of protopic is:
http://www.protopic.com/professional/science/moa.php?page=science&subPage=moaIt's not surprising they wouldn't understand the mechanism exactly -- the whole mechanism of itch itself is only poorly understood, from what I have read, let alone allergy reactions in general.
As for the drug's effectiveness, I don't think that's really up for debate. In my own case, I had quite severe atopic dermatitis my entire life, never responded well to topical steroids, never found anything to really control it at all other than prednisone, until in my mid 20s I got on protopic right before it came on market. With 80-90% of my skin surface covered in eczema when I started, my eczema was effectively cured within a month or two, although it took another couple years for my skin to mostly heal. Since then I basically don't have eczema anymore, although my skin is still symptomatically extremely dry and sensitive so I have to pay attention to that. If I cut back the protopic my eczema flares up again.
For me it has been nothing short of a miracle drug.
ADDED: One funny thing, though, is when I get patches of dyshidrotic eczema, the protopic doesn't really do anything for them but topical steroids usually do (opposite of the pattern for my normal eczema). It's strange, but my derm was aware of this difference and told me I would probably have better luck with the steroids on the dyshidrotic eczema. *shrugs*