Quality

Now, let me define quality for you. My personal definition of quality is delivering exactly what the customer wants. No more, no less. How does that relate to all of this?

Well, is implementing draconian (boy, I love that word!) copy protection measures one way of addressing what customers want? Try to justify it all you want, but abrasive methods are counter-productive. Sure, publishers will give all of the excuses they want. My dad told me, give me one excuse and I can give you a thousand opposing excuses. In other words, excuses don't hold water. By trying to reclaim their so called 'lost sales', they will alienate and irritate their loyal PAYING customer base.

Sure, inserting the dumb CD or DVD just so it can verify that you have the real one is somewhat of a small inconvenience. 2K Games recently dropped that little bomb onto their PC fanbase (oddly enough, the Xbox 360 doesn't suffer from this nonsense), and complaints are pouring through and flooding their forums.

Post Mortem

I bought the retail version of BioShock because I already have a lot of games on my Steam account and didn't want to fill it up any further. If I knew that it would be such a nuisance to activate a retail copy, I would have bought the Steam version.

I feel cheated in that regard. Their ingenius plan backfired and now, droves of angry new PAYING are trying to 'activate' their copy.

Ken Levine, the lead designer of BioShock, stated that the stupid copy protection would be removed later in the future. Here's a quote :

This activation is for the early period of the game when it's really hot and there are people really trying to find ways to play the game without buying it. Of course, there are a lot of people who are legitimately trying to play it. We're not trying to be Draconian, we're trying to find a balance.

I must say that your 'balanced' approach is a little bit skewed. Please do try harder. After all, you can't always get things right the first time around. Let's dissect this :

1. You need an Internet connection only to activate the game.
   Well, that doesn't sound too bad right? Hmm.... Maybe not... Only 17.8% of the world's population have Internet access. 69.5% of people in North America has Internet connectivity, 39.8% in Europe, 54.5% in Austrailia, 19.8% in Latin America, 11.8% in Asia, and even less elsewhere. Well, there goes a LARGE chunk of your potential market, huh?
   Even then, those who have Internet connectivity have to contend with activation issues.
    
2. Limited number of installations.
   This has to be the most retarded thing I have EVER heard of. During launch, the limit was an appalling and miserly TWO installations. Generally, it should be enough, but what about gamers who tend to reformat a lot. Or those who have problems or accidents that warrant a reformat?
   They then increased that limit to 5 installations (woopiedoo!). It was also said that they would release an 'uninstaller' that would 'free up' an installation from the allocated 5 installations. But doesn't this limitation of the number of installations qualify as 'Draconian', Mr Levine?
   I, as well as the majority of your paying customers, surely think it is. A balanced approach would have at least involved you considering the interests of your paying customers as well as your own.