They tried to steal mine this way a couple of years ago, so I can explain the procedure. First they punch the lock cylinder in the driver's door. The door handle and base are plastic and hitting the cylinder hard will break the plastic ears that hold the cylinder in. Then it is a simple matter of turning the entire lock cylinder to unlock the truck, which also turns off the factory alarm.
The ignition cylinder is forced by ripping away the column cover to expose the protruding end of the cylinder and using vise grip or channel lock pliers to force it to rotate. There is a steel pin that prevents this, but the cylinder housing is aluminum, so they are trying to break that. The Passlock is entirely contained in the ignition lock cylinder and housing, the key has nothing to do with it, so if you can turn the cylinder the Passlock system is happy and lets it start. Getting the locking pin housing to break is a 50/50 proposition and depends partly on how good of a grip they get with the pliers. In my case they twisted off the end of lock cylinder instead and couldn't get another good bite on it with the pliers, so they gave up at that point. Sometimes, instead of pliers, they drive a screwdriver into the ignition lock cylinder and try to force it by using some kind of lever to rotate the screwdriver, but again, sometimes the soft metal of the lock cylinder gives first.
There are products out there that try to interrupt this method, like the Club or Jimmi Jammers, but from my research I don't think any of them are more effective than a good aftermarket alarm or a hidden kill switch, as others have been suggesting. Back when mine was broken into I had modelled the door handle base in CAD and was planning to have it machined from aluminum or steel so that they couldn't punch out the door lock, but before I got finished with that project I got a new Escalade, so never did get any made.