The arguements and my rebuttles:
1.)"Valve is screwed because no one will liscence" - This is a silly arguement if I was going to put time developing a game I hoped to sell I sure as hell wouldn't do it on code which could easily be determined stolen. Some companies might take some of Valve's idea's and use them in their own projects. But once you start using Valve's code it gives them more incentive to liscence all of Source.
2.) Cheating - There may well be more cheats. Unfortunate but true. As far as I can tell Steam is simply a method of preventing cheating, so as far as Valve is concerned this is all for the best. "Keep those monthly payments comming!"
3.) "We owe Valve so this is terrible" - We do, HL was a great game for $50-$60. No denying it, but the major popularity came from Valve essentially exploiting the mod community. All modders want is a large possible install base and untill there are free engines available they will continue to use the largest engine available. HL2 takes this for granted with the introduction of Stream and monthly payments. Their business model turned from "Good" to "Evil", watch as public oppinion turns from "Positive" to "...".
4.) I look at the whole thing as the first chance for a mod team to develop a game complely for free with a current engine. If games are not created and released through the warez distribution system it will be a shame. Valve gets 50-250k to liscence their engine, I think they should get approximatly that much if someone releases a free (In both ways. [I.E. Beer and Open Source.]) modification. If you want to get up in arms about it feel free to pay them $50 when you download any free games which come out, if they make it possible I intend to.
5.) Security stuff - Let me just reiterate here, Valve did nothing wrong.
6.) Why only the source? - If hackers had access to all the game resources (Which they almost certainly did) why only release the source? It comes down to a hacker mentality that people are inherently good and therefore deserve access to almost all information. Releasing just the source means it's not a pirate release but an opportunity for the internet community to develop using these tools. People can now develop their own games based upon this while not hindering Valve's ability to release a quality product. If everyone did this Valve would indeed be thrown back in to the melee of competing game engines but the outcome would be better products all around. After the Steam fiasco (They are essentially getting people to pay, monthly, anti piracy servers.) I don't think we owe Valve enough to cry over a general improvement in gaming to their minor detriment. From now on every game that is released should have an engine and netcode equal to HL2. So Kudos.