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It's good this way, keeps the pirate kiddies crying.
Well, the issue is whether it's just use steamwork to authenicate users, or everything goes between steamworks. All we know is that users connect to the host player.
If it's just authenication, then for gameplay purpose will be same as LAN.
If everythign goes through steamwork, then it will run into issues that you are talking about.
If it's the first case, since it's LAN game, it's easy to add other players as steamfriend. Then just set the game to private, and invite your friend.
There are cheaters anyway, always will be.
Also, instability. So yeah, way too ♥♥♥♥♥♥♥ bad.
Of course developers will never acknoledge that they'd need to break the laws of physics to succeed and keep chasing the Philosopher's Stone, ensuring that legitimate customers will be greatly inconvenienced while hackers get the same product without the annoying always on DRM.
http://www.escapistmagazine.com/news/view/114391-Valves-Gabe-Newell-Says-Piracy-Is-a-Service-Problem