I don't think Alex Hempel quite understands whats going on.
So crash course:
Steam arose from Valve's efforts to distribute their own games (actually patches initially). These games were & are encrypted. This is what the GCF files are. The keys needed to decrypt do not come with the GCFs...else it would be too easy to decrypt. Instead they are temporarily grabbed off the server once Valve made sure you paid. That is the way it was initially designed.
After this a bunch of other features were added by means of duct-tape, without changing the underlying fundamentals. To keep things simple, retail games are treated the same way as Valve games even though they aren't actually encrypted (NCF files & data). The offline mode effectively grabs these keys and stores them a bit more permanently....this is why you must be online when selecting offline mode...the keys aren't going to arrive via smoke signals.
Some of the above might have changed with the new content system, but I doubt it.
