Overcharging you for games and having the service itself fail are two completely different things. I am strictly talking about the complaints people make about depending on Steam as a service in order to play their games. That has never failed me. Calling Steam's pricing policy a "failure" is just an emotional argument and not valid against what I was arguing.
However, on the subject of pricing, even if they weren't overcharging Europeans for games, the games are still way overpriced. When you consider they don't have any of the additional manufacturing/packaging/shipping costs associated with physical copies of games, why do they both sell at the same price (in U.S. dollars)? This is not just a Steam thing, though, it is a problem for almost all digital distribution.

But you do realize that some people are having these problems, even though you are not.
Myself I've been pissed at the "game is unavailable, please try again later" message many a time. Usually I have a limited window in the day with which to play games and it's really fucking annoying not being able to play it when I want to, that is when I at all can, because of some random crap like that that occurs for no apparent reason. This is a problem that is exclusive to Steam and believe me, they have had their share of complaints about this by now.
The problems are very real and the complaints are justified.

Unless they have patches for all the games already written and being held in escrow then this statement means absolutely nothing. Furthermore, if Steam did go under they'd probably have little say in the matter of what happened with regards to people's games remaining playable. Between publishers (who only allowed their games to be distributed by Steam under specific contracts) and even more over creditors (who will be after all of Steam's assets, which include current customers tied to Steam's service) the folks at Steam simply wouldn't be able to strip out the required authorization unless the aforementioned parties first signed off on it (rather unlikely to happen).
The bottom line is that at any time access to games purchased on Steam can suddenly be cut off, even if it's fairly unlikely this will happen anytime soon. Now, as long as you're aware of it and have factored it into your decision of whether a Steam game is worth the asking price then there's absolutely no issue. Just understand that others have also run through this same analysis, and for them the fact access to Steam games could be cut off pushed the value of those games below the asking price, and thus naturally they don't wish to buy the games.
For myself, I've bought a few games that require some kind of remote authentication (though none through Steam), but as I regard these purchases as rentals of an indeterminate length the amount I'm willing to pay for such a game is significantly lower ($20 is about my upper limit for such games). It all just comes down to an evaluation of what is being purchased, and what that thing is worth to each person.

You are assuming that, in the event that Steam goes under, they would have to release patches for each and every game they sell, when it is far more likely that all they would have to do is release a single final update for the Steam client itself. After all, it is the client that handles authentication, not the individual games (unless the game includes additional DRM), so all they would really have to do is alter the client so that it bypasses authentication or always returns a positive authentication without needing to connect to a server.

Huh? Of course they can be bought. Perhaps you mean that they can't be the subject of a hostile takeover.
Regardless, you overestimate the longevity of a service like Steam. These companies come and go, just like every other company.I really don't know how to say this without sounding patronizing, but that's pure fantasy. When online service-based companies go out of business, they have more important things to do than take care of their customers--they have to take care of their primary stakeholders, starting with the VCs. No one has the time or motivation to write new code to unlock everyone's games (in this case), even if they had the mandate to do so from their investors. There have been plenty of examples of this.

Same concerns still apply. Creditors would be even more likely to go apeshit if the Steam client was opened up as opposed to individual games. And again, unless such a patch is already written and in escrow then any and all promises are meaningless.

I know I haven't seen the contracts Valve has entered into with other publishers, have you? For all either of us knows, those contracts include a statement allowing Valve to release that client patch as a condition of selling their games through Steam. Of course, it could just as easily not say that, but either way, we are both making assumptions about Steam and Valve that neither one of us really knows to be true. The difference is, I choose to believe what has been said by Valve about how they would handle the collapse of Steam, rather than assume that they must have lied and will screw us completely our of our games.

Haven't most/all steam games got functional cracks now? From a strictly pragmatic view as long as you can still play the games, what does it matter?

Sorry, for all the edits. I figure it's better to add replies to one post as I have time to read through the thread =)
But what if you want to play a game on a Notebook/Netbook where there is no internet connection?
Well, seeing that most notebooks now have some form of built in modem/net connection, what's stopping you from installing the game on it, running once while you have the net connection and then continuing to play it once you don't?
If you run the Steam client without a net connection (and have saved your login information) it'll run any game that has already been run once (with a connection) perfectly fine. It's only when you try to use the offline mode with a connection present on your PC that offline mode tends to screw up.
I had to change ISPs last year and was without an internet connection for a week or two, in which time ALL of my Steam games still functioned perfectly without an internet connection present.
Well, maybe Steam never failed you, but they failed all Europeans by increasing prices of games by 42% (and sometimes even more). According to Steam 1$ equals 1€ .
And by all accounts, this is the same reasoning used by other DD services too. I hear that GamersGate does the same for a lot of their titles. This isn't just Valve suddenly upping the price on you because they thought "hey, lets piss off Europe!" It was more likely that publishers decided that they wanted to standardise their pricing over DD services that offered payment in Euros.
It's the same with the consipracy that EA suddenly forced the regional pricing on Steam. That's utter crap. Regional pricing has always existed on Steam, even when they charged all regions in USD. Besides, it was a large number of UK and Europe based users regularly asking for pricing in their currency that resulted in Valve doing just that. Ie, this is a case of, "beware what you ask for, as you might just get it!"
And no. I'm not a Valve or Steam fanboy by any stretch, but I don't buy into these obviously stupid tin foil hat requiring conspiracies either.
Myself I've been pissed at the "game is unavailable, please try again later" message many a time.
In all fairness, that's a really poorly worded error message. It doesn't actually mean there is a problem with the Steam servers. It's an indication of a problem with the files on your PC. Speaking from personal experience, I have only ever had this message appear when something has interfered with the local files. Such as Commodo locking down access to the Penumbra.exe, or Lucas Arts accidentally releasing the debug version of some of their games on Steam (which won't run without the required development tools) and so forth.
Even when the authentication servers have gone down (I can only recall this happening twice in the last 5 years or so for any longer than 5 minutes or so), the message given is different to that one.
Unless they have patches for all the games already written and being held in escrow then this statement means absolutely nothing.
They don't need a patch for every single game. The patch deals with how the client launches the games. It will simply bypass the client check that makes sure you actually own the game. Sure, this won't do much for games that use additional 3rd party DRM, but then, that too is no different to retail.
Regardless, you overestimate the longevity of a service like Steam. These companies come and go, just like every other company.
With the exception of the very short-lived Trition, can you name any well-known (or large-scale) digital distributor that has already gone out of business? If not, then you can hardly quantify your claim that these "companies come and go" on a seemingly regular basis.
Haven't most/all steam games got functional cracks now? From a strictly pragmatic view as long as you can still play the games, what does it matter?
If not already, I think it's pretty much a given that someone somewhere would decide to um... engineer such workarounds, in the very unlikely event that they would be needed.

Actually I regard the matter as a complete unknown and make no assumptions about the situation at all. As I said before, I regard any game with remote authentication as a rental of indeterminate length. It could be mine for as long as I live, or no longer than the next time authentication is needed. This doesn't mean I won't buy such a game, it simply affects what I value such a game at, and thus how much I'm willing to pay.
If that's the solution then why bother buying the game at all? After all, you'll be breaking the law either way.
In focusing on the minutiae you completely miss the important point- unless such a patch is already written and being held in escrow then any promises about the future availability of games mean absolutely nothing. How long the games you bought will remain legally available remains an unknown, influenced by factors completely out of your control.

Yes. Such a patch has already been written. That, again, has been stated by Valve. And again,
How long the games you bought will remain legally available remains an unknown, influenced by factors completely out of your control.
This is no different to retail bought games. For which you will only have access for as long as you have access to the code. What if your media is lost, damaged or destroyed by factors completely out of your control? What if the availability of replacement media is removed by factors beyond your control? What if PCs suddenly no longer used DVD drives or drives of a similar form and, in the future, only supported solid state technologies such as future versions of USB flash memory? In all of those cases you've lost access to your game through no choice of your own.
So again, how is Steam or any other form of digital distribution, whether client based or not, any different to retail and these unknown factors you appear caught up on? Seems to me, you're just now clutching at any reason to avoid using Steam without considering how exactly those reasons apply to any other form of distribution.

Quite true but the illegal method is a fallback rather than a first option and is not morally questionable, its only the letter of the law that you'd be breaking. Sure that'd mean sod all in court but still you paid for something and as far as I'm concerned have a right to use it if the place you bought it from happens to go tits up. I've always thought the whole reverse engineering / file modification prohibitions were targetted at stopping the copying of code rather than circumvention of drm for personal use

In those instances YOU could take control and protect your own media & convert them to contemporary formats, I'm pretty sure the same couldn't be true of things that require external activation

Could you please point me to a press release that confirms this? The more details the better.
All of these things are factors I take into account when purchasing games. There are risks associated with every form of media and every method of distribution. There are ways for every form of media to fail, some unique to the media, some applicable to all forms of media. Some of these risks can be mitigated by actions I can take, and some cannot. Again, all of this factors into the value I place upon various products.
I don't believe I ever stated there was any kind of fundamental difference between Steam and other forms of distribution. Remote authentication carries certain risks; physical media carries other risks. It falls to each individual to evaluate, based on imperfect information, how significant these risks are to their intended use of the product, and thus how these risks impact the overall value of the product.
Understand that I don't have anything in particular against Steam. The reason I haven't bought any games through them to date is because when evaluating the products they offer I either don't find the product worth the asking price (and the authentication component and associated risk is only one factor that plays into this), or I find a better value for a similar product elsewhere. Obviously your evaluation of their products is different from mine, and hence you have bought products from them while I have not. I really don't see it being any more complicated than that.

There's nothing on my PC that should interfere with files so I'm not buying this. I've had this error message pop up on virtually every type of game. I've seen it trying to play HL2 as much as I've seen it trying to play Wolfenstein 3D. I've also seen it on several different PCs I own.
Sometimes the problem goes away within a minute or two. Sometimes it doesn't. Appears fairly randomly overall.

I always assumed that was a connection timeout