Lifelong game pirater here, back to the Amiga 500 games bought on floppies from a software cracker (yo ho, yo ho, a pirate's life for me! went the into screens)
Australia has always been shafted in price - a AAA game for $110-$120? Total nonsense, even when our dollar was very low.
Steam is largely what's turned my behaviour around. I've always bought a few, pirated a few, but the convenience of Steam is hard to beat. I mostly wait for specials or bundles, and have a lot of indie games (my catalog is up around 200 games, slightly less than half are unplayed bundle-fodder). Mid-year and new year sales are great times for bargains. But a AAA game at a ridiculous price? Hello pirate bay. Duke Nukem Forever at $80? Good luck with that (not that it's a AAA title... but it theoretically occupies that space).
I've found that over the years, with few exceptions, once a game is played, it's done and I don't go back. If I do go back... it's pretty dated and I realise it was better off in the realm of nostalgia. For me the issue of "but what if Steam dies / goes offline - you'll lose all your games!" is a non-issue - I have a couple of racks of dusty game CDs behind me that haven't been opened in years.
Long story short: it's mostly about the convenience, but partly about the price.