These are good points, but modern PvP games still support custom matches and going from there to self-hosted servers isn't really much of a leap.

In fact, I believe Valve's new game Deadlock does let you run your own dedicated servers.

Less games actually use Steam's DRM than people think. Even the ones that require Steam to run often just use their API for stuff like multiplayer functionality or displaying leaderboards.

There's an open source library that you can sub in to emulate the API and run the games on LAN without Steam. I believe there's no decryption involved so it should be 100% legal, just like how Proton reimplements Windows APIs.

Don't Starve Together scratches the MMO itch for me. It's not an MMO, but there are public servers where you can hop in and hang out, raid bosses and whatnot. I have ~4k hours in it now.

Valve does seem to contribute substantially to the development of their games, at least. Turtle Rock's Evolve and Back 4 Blood had nowhere near the success of L4D/2, which is still going strong 15 years later.

As the other commenters have mentioned, this is part of the shell configuration and outside the scope of the terminal emulator.

You can configure this yourself by adding shopt -s histverify to your bashrc.