People would use that service instead of Steam, publishers would add annoying DRM to mitigate lost sales, etc etc.

The current illegality of the piracy website prevents them from offering a service as nice as Steam. It has to be a sketchy torrent hub that changes URLs every few months. If it was as easy as changing the url to freesteampowered.com or installing an extension inside the steam launcher, the whole "piracy is a service issue" argument loses all relevance. The industry would become unsustainable without DRM (which would be technically legal to crack, but also more incentivized to make harder to crack).