Some will argue that physical discs/books/etc. are less secure than digital ones like you might have on Vudu or Google Play because they can be scratched, broken, stolen, ruined in a house fire, etc. But in extreme cases, they're covered by your insurance. The scenario like you laid out is putting all your faith an a company to have your back, not stab you in it.

Its true, you never really own anything you buy and access from a cloud service, and they can change the TOS on you overnight or simply go out of business and you lose everything.

I'm very sorry to hear about your experience with Steam, that really sucks.