Can these games only be played through 3rd person portal? (i.e. Steam).
Yes/No. Everything goes through Steam, true but you've got final control over what you do and don't experience while playing the game. You can fully disable the Steam In-Game Community Interface (Shift+Tab), for example.
Does that mean that there are now two people who can pull the plug on you?
Steam isn't like that. Heck, there are some games that Steam has ceased to sell for one reason or another but if you purchased said titles before Steam "pulled them", you still have full access to those games in your library.
Does it have to play windowed with ads all around it?
Nope. Full Screen Mode with optional Community Interface (That is accessed via Shift+Tab and automatically pauses your game when you access it). Beyond that and a "Steam News" window that opens after you exit a game - which is just a brief little blurb about upcoming releases and daily sales occurring.
How far down has Defiance come from the $60 dollar price?
When it was on sale (The Summer Sale has rotating deals at 45 hour intervals) it was $14 I believe.
I avoided Steam for quite awhile because I distrusted the whole "Digital Distribution" business, but consider this - Valve made Steam successful by making it work for the gaming industry. And unlike EA's Origin service, Valve is a private company not beholden to shareholders or the stock market - only the customers that use the service.