Partly because the benefits of Steam (infinite, fast, direct downloads; achievements and leaderboards; cloud game saves; fast patch download; occasional purchase perks such as TF2 hats) far outweigh the negatives (purchases tied to account name; only one account "online" at a time; occasionally weird/buggy "offline" support)

I was a lifelong pirater of games, rarely bought any (though ironically Paradox games were bought, I loved them so much), and Steam turned that around. I don't buy AAA games at full price, which is ridiculously high here in Australia, but Steam has regular sales with significant discounts. I'm not a poor student anymore, plus Steam is much more convenient than pirating. I'll pay a few dollars to avoid spending time finding a torrent, then reading the comments to see if it's good or not, then waiting for the seeders, etc.

Counter-Strike is actually one of those instances where DRM adds value to a product for paying customers. Counter-Strike is a very popular target for cheaters using client hacks like like aimbots and transparent wall hacks, and one of the ways to avoid those players is by hiding behind a pay wall. Every time a cheater is caught and banned, the only way for them to get back in is by paying $10 to re-buy the game. Adding DRM to the client ensures that this pay wall remains intact, meaning that cheaters can ruin my multiplayer experience constantly only if they are willing to inject a fair amount of cash into the system (and very few are).

There's the fact that if you're caught playing pirated games on Steam they can easily close your account and you lose all the games you paid for.