Well first of all, the game appeared to be playable, so there's the piracy aspect.
The Source engine is also licensed to other games. If the code is public, other engines could copy their features.
Also it is very annoying to re-secure all your computers after you have been breached. Every single person has to change their password and you don't know what backdoors the guy has installed without a full wipe sometimes.
The game was not really that playable - you could boot up isolated levels, but it was completely unfinished. Huge chunks were missing. There's no way it would make a suitable replacement for the game that would be released much later.
Playable???? Not even close :/ It barely worked from what I can remember (I was very young at the time). It certainly made me even more excited for HL2's release though.
I reject the argument that Valve had it coming since they didn't take the time to secure their network beforehand. There are almost always going to be holes in the security of any system, especially digital ones (since they have a larger surface area to consider), so blaming the victim of a break-in implies that everyone should just resign themselves to being hacked sooner or later. Valve surely made at least some efforts to secure their systems, but even if they did not, that would not justify the morality/ethicality of entering their servers without permission.
> I reject the argument that Valve had it coming since they didn't take the time to secure their network beforehand.
I think the suggestion was that the time taken to secure their networks shouldn't be counted as "damages", just something that needed to be done regardless.
My point is that re-securing their network does not seems like a financial damage to me. If they had known about their vulnerability beforehand, I'm sure they would've spent the time and money to fix it then.
The Half-Life 2 source would have been an incredible learning tool for anyone interested in engine design at the time. That knowledge is their competitive advantage.
The Source engine is also licensed to other games. If the code is public, other engines could copy their features.
Also it is very annoying to re-secure all your computers after you have been breached. Every single person has to change their password and you don't know what backdoors the guy has installed without a full wipe sometimes.