As I understood it, that simply states that if any of those domains were implemented, they should loopback, as opposed to all domains containing "localhost" ARE implemented.
Valve/Steam solved a problem that the PC gaming community faced in late 2003, namely streamlined distribution of online content. Now there seem to be countless fighters in the ring; I can only see this experiment ending in either a small fandom based on exclusivity deals or smoldering out quickly.