You mean their brave foray into the shareware model? ID Software sold Doom directly to customers back in the early 90's.
And people are still doing this very day - from Spiderweb to Illwinter to Stardock. Based on some readings (net-wide), some (admittedly, we're speaking of an minority) people seem to think that Valve has just revolutionized software distribution. The only difference between now and 5 or 10 years ago is the cost of bandwith has made it easier than ever to distribute large files (don't tell Blizzard that though, hehehe).
This is more about the big guys being late to the party, though it wasn't their fault the ride wasn't ready for so long.
This is just another form of copy protection and a way of maximizing profits. This makes the cost to distrubite the game only the cost of bandwidth. IF (and that's a big IF) this makes games cheaper, I'm all for it. But I don't want to spend the same amount of money to download a game that I would to buy it. I think it is great that Valve is releasing the game this way but why should I spend my time burning it to a dvd or cd's and without a manual if I don't get anything extra for it and I don't get a price break?
I tend to agree here. The copy protection thing is something the jury will be out on for some time I think, but that definately looks like a reason they did it. The cutting out of the publishers I applaud them for and I hope they get a bunch of Steam sales, and make boatloads of cash. But the little guys have been doing this, for precisely this reason (well, that and they couldn't get B&M shelf space to save their lives), for some time.
What else makes Steam different from Drengin.net I wonder? I don't recall any sort of validation or checking done with GalCiv (someone correct me if I am wrong; IIRC I purchased it in the store but installed the basic Drengin stuff so I could get updates easily). So theres the copy protection. Access to all that Half Life stuff is nice, but you can get some pretty swell stuff with a Drengin subscription right now as well (the full Disciples 2 and there are more games to come). You have to pay more for that priviledge, and IIRC that payment lasts you a fixed amount of time (a year?), but every game available on Drengin is suddenly yours (so you don't have to buy GalCiv + full Drengin subscription). So some of this is not something Valve has done first either (though neither was Stardock the firs to do it; we go back to the 80s to find that).
Really, the timing was right for a dev to do this with a big game (both in terms of "prestiege" and in terms of file size). I'd probably buy HL2 in the store if I was going to get it, but maybe I'd go the steam route. Smaller devs can easily allow someone to "backup" a downloaded game (it takes one file, post registration, for any of Spiderweb's games. And it's a tiny file). I find that preferrable to burning something as big as HL2 to DVD/CD(s).
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