It lost FULL radar contact at 35,000 feet... over WATER.
The only thing that could cause that is a total failure of the aircraft's integrity. Explosive decompression... or more likely, a bomb. The signal would register a major drop in altitude before disappearing as the plane broke up after a structural failure. Or the pilots would inform ATC of a problem. This would have to have been sudden, and catastrophic failure of the aircraft decreasing the mass of the aircraft instantly and cutting all power to communications and the transponder.
Seeing as it operates on the Boeing system it could be the old Hawaii airlines syndrome. (Dad and I never miss Air Crash Investigations) Its operating in Asia. Lots of short hops and constant pressurizing and depressurizing causing cracks that results in explosive decompression. But Malaysian airlines has an outstanding safety record. They have had almost NO accidents in their operational history.
My best guess would be that the stolen passports are actually the beginnings of this. It may be a red herring I know "but if you eliminate all possibilities the impossible however unlikely must be the truth".