The sleeve on my actually started to expose the wires as well. It's not nearly as bad as that, but if you bend the magsafe head about 45 degrees, you can see the copper wires exposed.
I think the main reason why the rubber sleeve began to pullback is because the way I unplugged the magsafe. Instead of unplugging the magsafe w/ the head, I used to just pull it off by the wire itself (perhaps some ppl yank it off because they think the whole magnet thing is cool). Now I unplug it by bending off the magsafe so I don't apply any unecessary pressure or force on the part where the sleeve is coming off.
I actually did a very unsafe but effective procedure to fix mine. I bent the magafe connector just enough so the end of the wire sleeving was exposed and I applied Super Glue, all around. I didn't get any Super Glue on the wire themselves of course and it works great now.
But i believe many people do yank off their magsafe on the wire rather than the connector, so that's why you see blog posts of the magsafe blowing up and sorting etc.