If you do something bad enough, steam WILL close your account. That is, you lose everything.
MS does this too on the XB360, friend of mine had his profile banned completely from Live. Lost the ability to re-download purchased content. So what my Xbox has is everything that was left on his old console (he sold it to me after that). If the software (arcade games ect...) gets deleted, it's gone. While he can still play games on disc, he cannot re-gain content he has previously purchased.
In a way I understand this, however since we are dealing with physical games...... It shouldn't be up to Microsoft to dictate whether or not you get to play games. However since this IS an always online console (don't argue that, it is) things aren't that clear. I would personally never get this for a console. If I get a console, it cannot be dependent on the Internet. One of the only reasons I get consoles (when I do) is to go to friend's houses and play games. Especially ones who have older consoles due to money. If I cannot do that, then there is no point. Sure one can argue "you have 24hrs", that's not acceptable.
Frankly they have ways of doing this without always online. Even just Online Activation/Phone activation would work better than this. At least then people wouldn't require internet to play it. Once a unique product is activated it cannot be activated on another console without the original owner's consent. BAM your problem solved.
Whatev though, just won't buy one.