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The makers of the game and Valve have a contract and Valve just can't break that contract just because no one is playing the game anymore. The makers of the game would have had to break the contract in some way and if that did not happen, then removal of the hub will not happen.
simple thing, if you dont wanna see it, simply dont go there. no one forces you.
The hub has no moderation, as it has been completely abandoned by the publisher of the game which dropped it years ago already, they just never bothered to remove the Steam hub of it. The developers of the game are also out of business, so there's no contracts involved at all, it's just a completely abandoned game hub that currently is pretty much only used to make posts/threads that are in violation of Steam rules, but without moderation, those posts/threads are never removed.
Except the only thing it's really being used for is to discuss, and advertise illegal private servers. Steam rules indicate you can't use the forums of a game for the purpose of advertising, so that's one strike there. Then private servers of online games are illegal, as they have no legal rights to host that game, so there's another strike against it.
By leaving it up, and given the content of pretty much the only posts that seem to be made there, Valve is effectively indirectly supporting illegal activities. The thing clearly has no active moderation, since those sort of posts/threads which are in clear violation of Steam rules even when reported, aren't removed, so that just leaves Valve removing the whole thing as the proper course of action.
Not to mention that copyright law and the entertainment business is a little more complicated than simply declaring things illegal and that's that. In fact, the copyright holder may even have an interest in allowing these allegedly illegal servers to flourish in order to see whether they should jump back into the game with a relaunch, remake, or spinoff game. This stuff may be useful for gauging potential market share/customer base.
I'm simply saying that they're the ones with proper legal standing to rightfully complain about this.
Not to mention that, as you observe, the game hub is basically advertising the game and keeping the playerbase alive, and in preparation for any re-release, remake, or spinoff that the current rights holder or a future rights holder may make. So even if it may be in their legal right to ask for the forum to be shut down, it may be against their economic interest to do so, which would be more important.
Do keep in mind that trademarks require regular legal defending to keep them active, but copyrights don't, and this is a copyright issue we're dealing with here.
Then people are not discussing the game, people are really only advertising illegal private servers. If some drug dealer tried to set up shop in your backyard, would you just leave it as is, or would you call the cops? Valve is hosting the hub, and Valve ultimately is responsible for what goes on there, so if there is no value to Valve in leaving it up, but there is potential for harm by leaving it up, exactly how can it be argued that they should leave it up? Perfect World/Arc should have removed it years ago when they shut the servers down, like other companies in such a situation have, but they're lazy as heck, and took about a year to remove the forums for the game from their own servers.
How are the servers illegal?
Also you call the cops for criminal cases such as drug dealers, not for civil cases like this.
There's potential harm in a darn lot of things. At the very least, it should be someone with standing to complain. Not us.
Simply saying "it's illegal" ignores the context within which a thing exists, which can be very important.
Even Watch Paint Dry's community hub is open, and that "game" was put up onto Steam via somebody hacking into the system
https://steamcommunity.com/app/445730
If you left something you don't use out in your front/back yard, and someone took it without consent, it's still regarded as theft, which is illegal. The people hosting private servers of online games have no legal ownership of, or permission to publish the games in question, so yes, such private servers are illegal according to the law. If fans wanted legal ownership of shut down games there are channels to go through to obtain them, the people hosting private servers haven't done that though, so they have no legal grounds to publish such games, whether they are charged, or not is a separate issue. Many people love to pirate games, distribute fan sub videos of anime, and so forth, then try to claim it's legal, when it's not, what people publishing these private servers are doing is basically the same.
Steam forum rules state they can't be used for advertising, which is pretty much all people have been doing with it for the past few years, advertising private servers. When what is being advertised turns out to also be illegal, then they're made all that much worse.