Looking at the last two sentences in part A of the Steam Subscriber Agreement:
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The Software is licensed, not sold. Your license confers no title or ownership in the Software. To make use of the Software, you must have a Steam Account and you may be required to be running the Steam client and maintaining a connection to the Internet.
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Read that multiple times and it seems that termination of a Steam account not only locks one out of downloads but also strips your license to legally use anything previously downloaded...DRM free or not.
