Well they didn't let them play online. From my understanding what happened is that the pirated copies all sent a request to the servers asking if there was an update. There was one but the pirated copies couldn't get it, nor play online. So while they could play single player it still dropped the servers to their knees just due to the shear number of update check requests the servers got. They only planed for ~50,000 on release and they had only planned on the beta testers to have access on Monday but Gamestop destroyed that plan.

And yet you don't have to have it installed to play the game it doesn't need to be running to play the game all it does it update your game. Now it can do a lot more then that but it isn't going to try to force you to use it. Your game/app is updated, you install impulse update and then uninstall it. It is as simple as that. But if you lose the disk you can always install it and download your game, as long as you registered it with them you can download it from them.

Truth be told it was never meant to be a "bait-and-switch" impulse just was not ready at the time. When it was ready they tried to move everyone over to it. Was it a smooth roll out? Not exactly but from what they have told us it was a lot smoother then StarDock Central's roll out.