I'm only talking about handling Steam updates, I agree with you on game updates. However, the Steam client can still access the user's home directory and create/access game data there, as all Linux apps do, so the current way of having Steam dump its binaries at the home dir is unclean.
Pretty much the only valid point is having to update the whole thing every release, but I've never seen the Steam client download an update that was less than 75 MB.