Adokat: There are much worse forms of DRM. The Ubisoft drm, for one, and especially TAGES. I absolutely detest it. It's the only drm that is bad enough for me to not buy the game at all.
orcishgamer: Worse is a terribly subjective term. I'm not trying to rekindle this flamewar. I get that Steam works flawlessly for a large number of people, I'm not trying to debate that. All I'm pointing out is that it's a bit more insidious in some ways than even Ubisoft's always connected DRM. It's simply a statement that requires someone to take a step back and look at it.
I'm 100% aware, for example, I could loose all my Arcade titles from XBox Live (though in all fairness they actually have a 100% working offline mode that doesn't expire until your hardware kicks it, which is ironically better than Steam). For me I rarely buy anything that's not already cheap as hell, I'm not willing to potentially lose down the road, and that is worth the price pretty much in the immediate term.
So why do I have a double standard (because I know it is one)? Well, I'll tell you:) It is because my console was always a closed platform with stupid restrictions. I will never support moving that bullshit onto the PC, the last free platform, and Valve/Steam pioneered it. I'm especially fond of pointing out their shortcomings for this reason, alone (and possibly unfairly so, I don't know).
I haven't followed this thread, so I hope I'm not retreading arguments here. It just seems that so much of your distrust seems rooted in harms that haven't occurred, and seem very likely to actually take place how you're describing. In practical terms, I'm just not seeing how Steam is having such a negative effect. There's a much bigger chance (for me) that I'll lose the little slips of paper for the physical codes for my games than that Steam will somehow go belly up and everyone loses everything-sorry, just not buying it. There are plenty of mods with Steam games, and I think they're pretty friendly to the community.
Now, if you want to criticize Valve, I'd definitely start by looking at their 18 dollar hats in TF2. It does reveal some worrying trends, and I think they're certainly open for criticism there. The worst sort of danger I foresee from Steam, is the potential for large-scale goofs like the mass bans in MW2 last year. Still, Valve clearly recognizes how significant it was, and I think their response to their mistake was appropriate.
I think you're missing out on a pretty good thing with Steam-I'm a very frugal gamer too (I almost never buy more than 2-3 full priced games per year). In fact, I only rarely pay more than $15 for a game, and most of my purchases on Steam were heavily on sale.
PS, if you're looking for a great deal, the Thief collection is $15 from places like Amazon..