hedwards: My hunch is no. Even now the results of the poorly designed services are apparent and they've managed to kludge together and bandage up most of them, but they still don't have a proper and reliable offline mode. You can only choose it if you've opted to store your credentials and if you manually choose it while you're connected to the net.
Not entirely true. If you get disconnected from Steam while being connected you can pretty much switch to offline mode rather seemlessly. The problems really only come during updates or if you're offline while losing internet. (Ie, I can pull the cable from my computer now and i'll be able to switch to offline mode easily.)
But yes, it still needs improvement, no argument there.
About the competition thing. It's hard to say. You could say that if it had had competition, perhaps it would have pushed them further. As it is, they basically had the foresight/insight to basically pioneer it on their own. You can say that they might not have had the structure to last if it had had competition, but in itself that's already quite a feat in my opinion, something a lot of places that have different/possibly better structure haven't done.
Also, about competition, I think EADM /Origin is really only 2 years younger, despite their re-re-re-release into Origin recently. They really should've put more effort into that long ago.
Also not sure what Blizzard is doing at the moment. I remember their roadmap including signing up third party publishers to Battlenet, but I think the timeframe on that particular one already having passed. Could still happen though I guess.