They also offer a variety of services which I greatly appreciate in this day an age.
I don't have to lug around all my cds/dvds/Floppies every time I move and honestly I've gotten rid of all my physical media (external hard-drives excluded) about 2 international moves ago.
It automatically keeps all my games up to date, no more Battlefield 1942 patch hell.
As a store front it allows me to keep up to date on game releases and even pre-load certain titles.
A robust offline mode which automatically works as long as you've downloaded the game and run it a single time while being connected online.
I use it as a unified launcher.
I use it as a communication tool dedicated to getting in touch with other people I know who are playing games and can easily organize matches of any game on our collective steam lists.
Also not all games come with the steamworks DRM and can be run freely without steam even being installed on the system. Granted you have to download it through Steam first, but that would apply to any digital store front. Not to mention I've never noticed the DRM in action, making it the most non-intrusive form so far and if it doesn't even bother me, I don't see much reason to rage about it if it means that Steam is more likely to stay in business.
I no longer have to input CD-keys or even worry about where I've physically kept the myriads of manuals containing them and installing software is as quick as simply wanting to play something and double clicking the title and download/installation is automatic. I don't have as much time to waste on gaming as I used to so streamlining it is in my best interest.
Having to live with the "fear" that one day my games will be gone is like worrying that a Jumbo jet will land on my house. Honestly, I'd just pirate the games I'd lost.