Actually it isn't "fraudelent advertising".
Not trying to troll or anything here, but you seem to share a common misunderstanding with the rest of the world. In the hopes of not getting modded down into oblivion, let me try to explain what is going on. And let me be clear that I don't necessarily support this model, I am just the one who risks his karma and dares explain it a bit better... :-)
You do actually buy something - but not "the game" as such. You buy a license. After you have purchased that license, it is yours. You can use it, or leave it idle somewhere, or burn it, or use it as toilet paper. The license does not give you copyright of the product; but you are free to use the license as you see fit, within the restrictions and rights granted to you in that license... and subject to local laws (which in some cases may expand your rights and in some cases limit it further).
This is in line with pretty much every other "license" in life; including licenses not related to software. A license is society's way of grating you certain rights in a limited fashion and it is used for a gazillion things other than software. You can be "licensed" to produce pharmaceuticals. Or fly an airplane in public airspace. Or recycle waste subject to strict environmental laws.Or carry a firearm. Or drive a car!
Since car analogies are the big thing in IT lets stick to that :-) You can "buy" a drivers license from a local driving school, but you are unable to "resell" that to another person, and you are bound by the terms of the license. You can't drive however you please either. You must follow certain ruled and protocols while driving (restricting the use of your car when operating it). If you loose its physical representation (the drivers license plastic/paper card itself) you are still considered to be "licensed" by the issuing state or country. You may get a small ticket for not being able to produce the little card, but that is not the same as "driving without having a drivers license". A drivers license is in many ways (but not all obviously) a good analogy for a software license. Both grant you certain rights but subject to a number of restrictions. Both are "personal" and cannot simply be passed on to other people. Neither of them are "physical"; they are both tied to your person in an immaterial fashion. Any physical object representing them merely serve as easy/convenient proof that you hold a license - the physical object is not the license.
While you have "purchased" your drivers license from the local driving school, that have not engaged in "fraudulent advertising" if they have used the words "buy" or "purchase" or "OMG get your licenze here for peanutz". But roughly the same condition apply to your drivers license as to a software license. There are many restrictions on how you can use the license, and if you give it to another person that does not in fact grant them "a license" to do anything. You are really just handing the proof that you hold a license - the license itself is not transferred. All the other licenses mentioned above follow this pattern as well.
In this sense Valve does not engage in "fraudulent advertising" because it is well understood that they sell licenses, not complete copyrights for software products. Or in other words: You buy a right to use the software in a limited way, you do not buy the complete copyright and full intellectual property. And giving your license to someone is really noting more than handing them proof that you are the rightful user of said license. The license itself is not transferred.
We may not like the way these things work, but that is an entirely different story.
:-)
- Jesper