This is nothing new. They sold Jagged Alliance 2 and Unfinished Business in broken states (UB couldn't even save) for well over a year. The quality of Steam really has hit the ****ter.
The only funny thing about the entire JA business was that support did everything they could to avoid the issue. They even left one of my support tickets untouched for 4 months.

Ahh but its a 4 year old game out of its support cycle and presumably worked at the time of the initial steam launch. If the money from the sales kept coming in, would you be realistically likely to test an old product periodically to ensure that people are getting what they paid for or just assume that if it worked at the start then there'd be no reason to suspect it wouldn't always work?
Since the game developers don't have any input into steam itself, its probable that they assumed the distributor would take care of their own system to ensure that it didn't break down. More fool them it seems.

The time it's taking to fix isn't the problem, its the fact that they know that the game is unplayable and haven't taken it down. Its the work of 5 minutes to de-list a product in a database and it should have been done as soon as it became clear it wasn't an isolated incident

we should probably cut them some slack.
When it takes a company over a year to fix a problem, and fails to fix others for almost the same amount of time; despite being fully aware of those problems, they deserve no slack. They are a business. They need to act like one. If they can't handle it, then they either need to hire more people who can, or they need to get out of the field.

um, but it was two months?

um, but it was two months?
Not for either of Jagged Alliance 2 or Two Worlds. The former was broken for over a year. The latter is still without it's patch, it also doesn't list the DRM on the product page. At least in the case of Two Worlds, you can use the retail patch, but it could cause you to lose yet another activation in the process.
But the situation with JA2 was so bad that the publishers were actually giving people free access to their DD versions to replace the broken Steam ones.

Technically they are acting exactly as a business would be expected to, in that by only providing the minimum level of support needed to keep people from leaving in droves they're maximizing their revenues. It's a scummy way of doing business and it sucks for those people who end up with a non-functional game, but until Steam's bottom line is impacted it's highly unlikely that their behavior will change. Now, I'm probably preaching to the choir with this bit, but the only way Steam is going to change the way they do business is if people start speaking with their money so that providing crappy service is no longer economical for Steam.

Ahh well thats acting more like a corporation rather than a business, its a different scale of greed & disrespect

Steam is so 2005. Archaic customer service, messy webpages, and a lumbering behemoth of a client riddled with bugs that may prevent you from playing your games at any moment.
I'm on a Steam boicot myself since they proved that their grasp of economics is below primary school level when they claimed that 1$ = 1€ .

Well.... the other day I bought Alien Shooter: Vengeance (2,5€) and it didn't work. So I checked the forums and found out that since the game was released you need to patch it manually in order to play. That's my Steam!

Opposing Force is still broken on steam too. And it's more than six months, for a game owned by valve ! Happened after a HL1 engine update.

This is not a Steam problem. This is developers problem, they didn't know anything about Steam (update policy; they are thinking Valve must patch their games through Steam but Valve not responsible for this, they must send patch files to Valve to update their games) but they are selling their games on that platform. We are talking about Reality Pump here. I have Steam version of Two Worlds and they still didn't update the game. I talked about them, and they blame Valve. I talked about Valve and they blame RP. RP is a really silly developer for me.
And not Earth 2160 only has a problem on Steam. The Witcher: Enhanced Edition has a problem too, I asked about support and they forward me to Atari support. I am waiting since 26 March but no answer. I have The Witcher and I was playing the game without having problems since the update that was released on 19/02/2009 on Steam. This update fixed EAX and Blur problems but game videos (in game videos and intro) are not working properly now. I have sound and subtitles but there is no video only black screen and this is not only my problem, I tried on 4 machines and (not the hardware issue). I think CD Projekt RED sent Valve corrupted patch files. Anyway Valve must test this games too, and that is their fault. Here is the error (blank) screen from Witcher, playing game with like this is a really awesome experiment. I am just imagining the videos. :P
http://img21.imageshack.us/img21/7400/errornsi.jpg
Here is my experiment with Ubisoft support about IL2: Sturmovik 1946 patches on Steam. This is really funny.
Me: Hi, I bought IL-2 Sturmovik: 1946 from Steam yesterday but I can't play multiplayer because game is not patched to latest version. It says I am not on 4.08. Can you send patch files to Valve to release the patch and apply the Steam version of the game? This is really great game and I want to play multiplayer too. Thank you.
Ubi: Hello there,
Unfortunately you will have to contact Steam on this, as they create there own patches for the games.
Kind regards,
Ubisoft Technical Support
Me: Hi, I know how Steam is working and I have contacted them for other games that have same issue and they told me publisher must provide them patch files and they said they can't release patch files without their permission. Here is the answer from Steam support:
"Patches are released on Steam when the publisher provides them to us. We are unable to release patches without their permission.
If you are experiencing gameplay problems with the game, please contact the publisher for support."
You must give Valve patch files to update the game please.
Ubi: Hello there,
We will pass this information on to the right department and we will get back to you as soon as we have a response back from them.
Kind regards,
Ubisoft Technical Support

This is why I always wait a while, and check the forums before buying games on Steam... Well, I pre-purchased Zeno-Clash, but considering that it's made using the source engine, I'd be damned surprised if it didn't work in Steam, but in all other cases I always check the forums.
Of course, I've gotten a obscure error for a couple of games I've bought, but none of them turned out to be related to Steam, as I borrowed the retail versions of them, and had the exact same error (GRAW 1 & 2).

This is not a Steam problem. This is developers problem, they didn't know anything about Steam
No, this is a Valve problem for not explaining how their system is supposed to work to the people using it to sell their games. This is Valve's problem for not taking the small amount of time to contact developers and remind them of the process when they are aware a new patch is available. This is Valve's problem for not taking that little bit of extra effort to ensure that their service is of decent quality. And if they can't do that, then it's Valve's problem for continuing to sell a faulty product once it is known to be faulty. And in some countries, if not all, that's in breach of trading regulations and bording on illegal practices.
They need to stop taking the easy route out -- passing the buck -- and actually work with the developers to solve these problems. After all it is Valve who created Steam and as such it is their responsibility to ensure that products which need to be modified for use with Steam, actually work before allowing them to be deployed on Steam. It is then also their responsibility to continually ensure that products work when something changes (especially when the changes are to the Steam client), if they wish to keep selling the product over Steam.