Ah, I see -- the reverse key approach. That is option 4, which I forgot about because it has nothing to do with key generation. What they are doing maintaining a database of customers who bought the game, and they have a repository of steam keys that they can automatically give out on request.
That works pretty well, but requires that the developer have a pretty large repository of steam keys, that they develop an online app for distributing them, and that the developer have records of keys sold. On that last point, we do not -- we have no idea who third parties have sold the game to, we only know our direct customers. If we made you register online on purchase that would be known, but that sort of system would be vulnerable to the same sort of piracy unless the key check was online rather than offline.
Also: for anyone else having problems with steam support, pm BurtonJ on the steam forums and he will generally hook you up. Steam support has been very iffy but he has been very reliable when it comes to this issue.
Anyway, not to belabor a point that is already moot for you zespri, but in case anyone else is reading along.
