The default scenario for WCF RIA Services assumes that you will create your business objects to be shared between the server and the client within your web project, and these will be replicated within your Silverlight project.
However, this scenario doesn't create an ideal separate “middle tier” where your business objects are contained within a separate assembly that can then be reused between applications.
This is where the WCF RIA Services Class Library project template comes in. It is possible, however, to move the business logic out of the Web project and into a separate class library, using the WCF RIA Services Class Library project template. So you can have your entities and metadata classes in a separate project from your server project. But you must add a reference to it in your web project where the silverlight is hosted.
This is a reasonable thing