You don't need to surrender your passport, you need to just show a copy of the page where it has your name and photo.
This is to make sure your name is spelled correctly on the reservation, and frankly this is common practice across most travel agents. They do not want to risk you not being boarding because of a spelling mistake or reversal of the family name/first name (especially as it is an international flight).
I have had to provide this information many times and it is better to be safe rather than have to scramble later on to change the name - even risking a hefty fine to do so.
Keep in mind that on the flight reservation they have to type your legal name which may sometimes differ from your given name or the name you are using in other documents (preferred name, for example).
Sometimes, your passport still has your maiden name if you are married.
For situations like these, it is best to error on the side of caution.
Regarding security if you wish you can mask your photo, but make sure the following information is visible as it may be required by the agent as part of the advanced passenger information that is required by some airlines:
- Passport Number
- Issue Date (and place, if applicable)
- Expiry Date
- Passport type
- Issuing agency (if applicable)
- Place of Birth (if applicable)
- Father's Name/Husband's Name (if applicable)
You can mask the rest of the information.