Proximity sensor without proximity sensor; is my hand magic, my competency crap, or my arduino fried?
Nothing's broken; you have discovered  the nature of a floating pin.  Unfortunately, that means that strange things happen...

A very small charge from your hand is triggering the logic because the state of the pin (high or low) is not set.  To fix this, you need to add a pull-up or pull-down resistor (or activate the internal input-pullup resistor).

You can read about how to accomplish this here.