Yes, that is what we were told, and as was pointed out very quickly password protected RAR files are terrible for that, there are much better solutions.
This is why I'm still concerned, even with the rollback of the password protected files: they introduced a feature that not only did not solve one of the major issues they were aiming for, it actually broke compatibility for some users. The end result is that it was a feature that did nothing but cause its own problems. If it had actually solved the problem you wouldn't find me here complaining, I'd just quietly grumble about being cast aside again.
There are two possibilities on how this happened: either they lied and "protect users" was an afterthought justification to what they really intend to do (I will make no speculations as to what true goals they may have had though my mind can be quite imaginative) or someone pushed this as THE solution to their problem and no one stopped to question it. Both situations are bad news.

...or someone with a hair too much autonomy didn't think things through.

I've never even used Steam :)

Let me put it this way. I go to a store and buy a Playstation 2 game and then put it into my PC and use PCSX2 to run it and discover that it doesn't work. Do I then go to the store and complain. No I don't; the game works find on a real PS2 but not on my emulator. If you use Linux and discover that Windows based games aren't working the way you're expecting them to, then that's just too bad. That's the price you pay for using Linux and you knew this going in. There is nothing wrong with the game it works exactly the way it's meant to. It's you who trying to do something strange with it so take it up with Wine or who ever your favorite distro is. It's not the store's (in this case GOG) problem that you can't get your Windows based game to work. It's your problem so you have to deal with it.
A script, really. A script and a program I've never even heard of is easier to use then double clicking on the little picture? I doubt that. I also doubt that most users/gamers would want to do that either.

Bad analogy. GoG games, the ones that people are talking about here, are already being run in "emulators": be they DosBox or reimplementations of the engine, they are not running in the original system at all.
So to make things fair, lets fix your analogy. The game disk itself is the content and the PS2 is DosBox. In this scenario, I bought a broken PS2 off ebay and repaired it. It plays all games perfectly except that the network adapter is busted, so no online play. Oh well. GoGStop wants to give a grand user experience and knows that people have problems with scratched DVDs, so they design a new case to house the DVDs which plug into a custom peripheral used through the network adapter: you don't need to worry about damaging the DVD, the whole thing, case and all, plugs into this network connected peripheral and games are played that way. It's brilliant! Except for the user who doesn't have a working network adapter. That's fine, I guess; they don't claim to support anything other than their super friendly loader thing. It's a pain, but I can at least still open the case to get at the DVD and play it on my system.
Oh, look at that, they are now locking the cases shut. Claim that it's to protect people from getting a maliciously damaged DVD on a trade in. Now I can't use them at all. But at least the DVDs are protected, right? Except that nothing is stopping people from sliding open a little reading tab and jabbing it with a screwdriver, thus rendering the "protection" entirely useless.
"Just buy a working PS2" some will argue. Fine, that is literally all they claim to support, so whether the feature is functional or not is entirely irrelevant: I'm trying to use it in a way that they don't explicitly support. Shame on me. So I buy a second PS2 which serves the solitary purpose of playing games purchased from GoGStop. Hooray.
20 years pass. Both PS2s are a distant memory. We're up to PS9 now. The PS9, amazingly, features 100% backwards compatibility with the PS2. It's amazing! Just put in the DVD and it'll... oh, the DVDs are locked in their cases in some misguided attempt at protection.
So here I am with a PS9 fully capable of playing the PS2 games, and beside it is a 30 year old PS2, duct taped together with a makeshift network adapter soldered on so that I can play these special GoGStop games.

I don't think you quite understood what the analogy was. There's nothing wrong with using an emulator. Yes GOG games do use emulators but they've been tested and soled under the pretense that the will work. It's not that they are using emulates it's the fact that when you buy a game that says "Works with windows" weather it uses an emulator or not doesn't matter. What matters is that it works on Windows. If it says "works on Linux" then it must work on Linux. So when you buy a game that says "works on Windows" and try and run it on Linux and find out that it doesn't work, that's not the store's problem.

To put it another way. My argument isn't that you shouldn't use Linux or emulators; my argument is that you shouldn't approach the salesmen for your emulator/Linux related problem for a product that was never sold for that use.

I understood perfectly what you were trying to say. Your analogy was flawed. You equated what GoG has done with simply playing the game, but that isn't the case at all. Their installer has not broken playing the game at all, if we can get at the data we can play it, no problem. If you really want to make it closer to your analogy where GoG only supports "real PS2" hardware while we Linux users are "PCSX2 emulator" users then my analogy still holds more true than yours: the emulator is still 100% capable of playing the game but GoG has somehow locked it up in a way that only a real PS2 can play it, put it in a box that doesn't open unless it somehow detects that there's a PS2 nearby: they went out of their way to add something that didn't originally exist. and isn't required to play the game.
Not a single person has complained that a game will not run on Linux. The complaint is that we can't even get the DVD out of its jewel case unless it detects a genuine PS2 in the area. Once it sees that you have a PS2 and has allowed itself to be opened it can then play perfectly fine on whatever you choose, whether it is the real PS2 or the emulator.
So the argument "just get a PS2, that's all they support" is technically valid but irrelevant. Fine, I get a PS2 just to open the bloody box and then play the game itself on my emulator. Hooray, I've spent $100 on a glorified box cutter.
But lets continue with that and put my future scenario into place: 20 years later and the PS9 is 100% backwards compatible with the PS2 somehow (probably emulation but it's irrelevant) and all you need to do to play the game is to put the disk in. But the jewel cases don't detect a legitimate PS2 and therefore do not yield their goods. GoGStop went out of business years ago, unfortunately, the secrets of unlocking the jewel case without a PS2 lost and the odds of finding a working PS2 just to open the case are pretty slim. If we could just get at the DVD inside there'd be no problem playing it on modern hardware, but in their wisdom they decided to put something that works perfectly behind something that doesn't and call it "user protection".

They say "works with Windows", yes, fine, but the games themselves don't require Windows; they also work with Mac and Linux (and Android, iOS, Wii, probably PS3 and XBox: if it can run custom code someone's definitely compiled DosBox for it). We're not complaining that the game doesn't work, we all accept the risks and rewards that come with trying something unsupported, we're complaining that the packaging they've put the game in is fundamentally flawed, especially when you consider that most of these games originally came on disks without any "locking" at all: installing a game from a floppy or CD literally copied files from the disk to the hard drive. It would literally cost them nothing extra to provide the data files in a basic package alongside their installer.

TL;DR

Buddy, I'm sorry but I don't really care. I'm not interested in how our analogies compare or whatever. I made I point and there's nothing more for me to add.

I strongly doubt the compression statement . My experience and sources tell me otherwise.

For example: http://binfalse.de/2011/04/comparison-of-compression/

If you look only on compression (and not UX)MaximumCompression

Summary of the multiple file compression benchmark tests

[i]File type : Multiple file types (46 in total)
# of files to compress in this test : 510
Total File Size (bytes) : 316.355.757
Average File Size (bytes) : 620,305
Largest File (bytes) : 18,403,071
Smallest File (bytes) : 3,554[/i]

result/position of relevant compressors (good to bad)

Place | Name | Compression ratio | compression Time
------------------------------------------------------------------------------------
001 | PAQ8px |80.26% |23427sec (16.26 day!!!!)
049 | Winzip |72.73% |95sec
050 | Winrar |72.61% |48.7sec
052 | 7-Zip |72.44% |91.1sec
058 | WinACE |72.03% |109sec
060 |Stuff-IT |71.77% |35.7sec
170 |bzip2 |65.95% |48.7sec
201 |gzip |63.69% |35.1sec

(surprisingly, Winzip is a step above WinRAR, but they are fairly close... seems WinZIP made progress)

Why the linux commandline (bzip2, gzip) tools suck, is due to the separation of joining step (TAR) and compression. Integrated compressors (like WINRAR and WINZIP) introducing clever sorting algorithms in their solid archive creation, increasing the compression rate sometimes drastically (e.g. LATEX projects, many small files of mixed type).
Also, WinRAR has multithreading support since version 4.2

No you didn't, you said a bunch of words that didn't actually amount to anything. You could have been talking about the weather in China for all the relevance and understanding you've demonstrated.

Add? You need to have something to begin with in order to add to it.

Did you try just using innoextract on the .exe or unrar on the bin file?

And which was the script that you tried and what error msg did you get?

I don't have KOTOR but the scripts assume a password-protected RAR-format BIN file.

What does `xxd -l8 /path/to/first/bin/file` say? If it says "Rar!....", have you tried unpacking it without specifying a password?

If it doesn't say "Rar!....", have you tried pointing innoextract at the EXE to see if they switched back to using BIN files that are an extension of the InnoSetup installer?

I just bought a game using the new RAR-format installers (Star Wars: Empire at War).
This one is *not* password-encrypted and can be extracted directly with tools like unar. (you don’t even need innoextract)

Here is what I needed to do, hoping a similar method will work for KOTOR:
_renaming the .bin files:
setup_sw_empire_at_war_gold_2.0.0.3-1.bin -> setup_sw_empire_at_war_gold_2.0.0.3.r00
setup_sw_empire_at_war_gold_2.0.0.3-2.bin -> setup_sw_empire_at_war_gold_2.0.0.3.r01
_extracting with unar, giving only the first part as an argument:
unar setup_sw_empire_at_war_gold_2.0.0.3.r00

No password is needed at all.

I don’t own KOTOR on GOG (yet), so I can’t affirm it will work the same way, but it’s surely worth a try.

-----

I see you used "a script" to extract your game. Can you point us to this script?
If it is a script assuming a password-protected archive (like ssokolow seems to think), it might not work with an archive not password-protected.