If it's backed up on your hard drive, wouldn't it already constitute being already installed? Even if it's an external drive, you can play straight off of it.
When you make a backup it's compressed in size and has an installer.
Nobody knows what will happen in the future with any certainty.
Here's an example scenario: Gabe Newell dies of a heart attack, and Valve is sold off. Ubisoft purchases it, proceeds to run Steam straight into the ground, people leave in droves and eventually Ubisoft kills Steam because it's no longer profitable.
All of that could happen in a span of five years, perhaps even less. And it's only one of a myriad of ways in which Steam shuts down; other scenarios might take longer, but the end result is the same. And what if Steam doesn't shut down, but simply became so much of a nuisance that you don't want to use it? Not even their promise to unlock all your games applies anymore, since Steam is still alive.
You might be willing to accept the risk of losing access to your games, but that doesn't hold true for everyone. Losing one game is unfortunate, two or three regrettable, but we're talking about accounts that may have hundreds of games; what's the value of that? Thousands of dollars' worth of goods, ready to disappear at a moment's notice. Are you willing to accept the risk of losing all that money, plus more for the games you have to repurchase? Not everyone can afford to do so.
Ok, here's another equally valid scenario: Gabe Newell gets a heart attack, but at the last moment is saved by god. God says "The ways of your people is not in compliance with the original thought that started the universe. I shall now inject the sacred fluid into your brain that shall guide your people through these troubled times". Gabe, recovering from this religious epiphany but in no way hindered because of this sacred euphoria, goes straight to work with his new super skills and has all the ideas for a perfect utopia completely clear in his mind. However, it involves making super machines that will put the majority of humankind out of work.
With every machine created by Super Gabe thousands of people lose their jobs to the machine. First he created the machines that would take over simple jobs of servants by replacing cleaning people with automatic cleaning robots. Next are the jobs that need real skill like tree-cutting, metalwork and any form of electronics construction for example.
Any sort of business that creates any sort of service is soon taken over by the machine overlords too and people soon forget there was ever any official function where you didn't have to punch your punchcard to get any service, or cab drivers that were not automated machines but real people that you could talk to even if they didn't speak your language fluently.
A hundred years later, everybody is out of work because of the machines that have taken over all the work. Noone has any right to complain though, say the elite machine repairmen appointed by Gabe Newell, because everyone get's their appointed house and possessions in a quantity that is calculated by the Super Machine named GABE001.
What the GABE001 computer fails to predict though, is that with losing their jobs humans have lost their identity and try hard to fall out of line just to reclaim some identity the faceless machines have taken from them. Small groups of revolutionaries start to form, and Super Gabe, dressed in silkwhite sheets who fall ever so gently on his triple gut, recruits in the eager-for-work masses an anti-revolutionary army to fight the heathen machine haters. However, the people forming this army are so used to being useless by this time that any diversion that could make them of any help completely distracts them. So the rebels just ask for a salisbury steak (well done), or tell the armed forces that their computer seems to work so much slower these days, resulting in hundreds of army personnel trying to turn a computer on and off again for hours.
In the meantime, the rebels with their ancient skills they learned through secret sessions throughout the ages sabotage the machines that they think will mark the end of human individuality.
The machines broken, Gabe Newell is locked inside a (very large) box with a seal that will magically be broken in a thousand years, for when there should be a sequel to the story.
Meanwhile, everyone depends on the heroes that rid the machine shackles of mankind to further their quality of life by non-perfect but oh so human craftmanship and everyone is happy till a generation later everyone forgets.
The point of the story is twofold:
-Throughout all this, everyone could play games through Steam
-Stupid hypothetical future stories never helped anyone with anything, so stop it