Because you're guilty until proven innocent in their eyes (Piracy). Also, it's much easier for them to push out updates.
Personally, I like Steam, but I can see why those who don't have a constant connection or travel a lot wouldn't.
I was under the impression there was an offline mode that kicks in when you don't have an active connection at the time of startup.
I haven't used it in a while, but last I checked it had to check in, and if it lost connection after that, you could go into an offline mode. You couldn't just start in offline mode and play to your hearts content, you have to log into the Steam servers at some point in the process.
Of course, like I said, I haven't used Offline Mode in a while. Too bad I'm not at home to test it.