they do now after the last update

There are still many games that don't specify the activation limit (e.g. Two Worlds II) so Valve still aren't requiring full disclosure in this regard.

hmmm.... did not Top Ware patch out the activation limits from all their Steam games a year or so ago? they still use the horrible DRM scheme where you need to create an account and provide a lot of personal info, but I think it no longer has limits?

So what happens if you reach the limit? Does Steam take the game off your account and ask you for more money to buy the game again?

You contact the publishers to get more activations.

DRM as we know it, online verification, started in games way back with Mass Effect and it's 3 or 5 machine limit. That was very popular at the time. Steam actually started the shift to a general account-based DRM rather than a machine limit. Everyone seems to agree account-based is better, though SecuROM had the benefit of being easy to remove by simply swapping the exe file after install.

Some games from that period still sport that DRM because it was never patched out. Most of them have had the limit massively raised, however, so you will probably never hit it. The funniest one for me was an amusingly broken Russian RPG called The Precursors that I bought on Gamersgate. It has a 3 machine limit and NO revoking, which means you can install on 3 machines and that's it forever. Pretty crazy. I cracked that shit before I could even blink and feel zero guilt about it.

Anyway... not something you need to worry about with recent games, in my experience.

Wasn't there the same 3 machine limit in Spore, Sim City 5 and Skyrim?

Skyrim doesn't have any extra layers of DRM besides Steamworks, which by the way, doesn't have any limits in number of machines and installs.

No. The latter two are just account-based, the first one had a 5 machine limit if I recall correctly, and it was revocable. In other words the goal was 5 machines at once, not 5 forever. On The Precursors it is 3 forever, no revoking.

You choose what you want, really. It's all up to you.

Yeah, I remember my first experience with the activation limit was as far back as 2006 with Microsoft Flight Simulator X. I haven't encountered anymore issues with the latest patches, but we definitely had an issue one time with the activation limit.

Activation limits = Very bad to have.