The reason why they've planning all these irresistible deals is obvious: to crush all competition. Valve now has a lot of clout in the industry, and they're able to incite the editors into making these deals while the other DD services simply don't command as much importance.
Add Steamworks to that. Pretty soon the majority of the big new PC releases will come with Steamworks (and thus Steam) only. Eidos, 2K, Bethesda, and many others have already all done that. The only ones that won't are those who have a big presence in Europe (like Kalypso and 1C) and those who have their own DD store for their own games (like EA and Atari). Many people in the industry have already commented how making patches for many different DD services and getting them all approved is a huge hassle, so Steamworks is going to convince a lot of people not to bother getting their games to more than one vendor.
It's only going to get more ruthless from now on. How will the others survive? Even if Valve isn't such an evil corporation, it's effectively crushing all competition and there's nothing the others can do. Without the influence to get all these great promotions, no one is going to shop anywhere else than on Steam. Impulse's 2 year anniversary sale looks absolutely pathetic in comparison to the summer sale. Brad Wardell must be getting desperate.
The only way is probably going to be for them to find a niche. GOG already has one, Gamersgate has all these very European PC games, and Stardock sells indie games along with its own products.

Don't fret. One day, Valve will die. Until that day, we should spend out money wisely.

Right now we're seeing a cavalcade of DD services springing up everywhere. It's inevitable that for many the market will collapse as see no way it's currently sustainable. It's like the dot com crash all over again. Valve will survive that no problem. But then so will many others.
In the long run, the advantages Valve have now can so easily easily be lost as the market continues to change and grow.

As I was telling aliasalpha the other day, the only reason why Steam has managed to break out of it's initial muck was because of brand loyalty. In other words, necessity has allowed Steam to stay afloat in its initial years. For that reason, GamersGate and D2D have a good chance of falling out of the competition, unless I am mistaken and they both have some form of exclusivity to them.
OTOH, I believe that Impulse and GOG have a higher chance of surviving. Impulse has Sins of a Solar Empire and Stardock's own 4X games, which have been selling very well, cashing in on a niche market that only a few devs dare to tread in. GOG provides games not found elsewhere. It is perhaps too late for new competitors, but in the long run, my money is down that GOG and Impulse will outlast the rest of the competition - excluding Steam.

1. As Navagon pointed out, new DD services aren't in short supply nowadays. It can't be THAT unprofitable, when new ones still emerge.
2. 15 years ago, where was Microsoft? At the top. Where was Apple? At the rock bottom. Microsoft had to buy shares for, dunno 150 millions or so, to save them from going out of business. Where's Apple nowadays?
3. Let's pretend Valve didn't made their move with Steam first, but Impulse (or any other DD service) did. So that Impulse would be the big player now and Valve's Steam one of the smaller ones, trying to catch up - would the world of digital distribution be a better place?
4. Last and most important point:
I'm a customer. I don't run your DD service, I don't own a share of it, I don't get a dime out of it. You want my money? Then convince me to buy from you. Be it through prices, superior service, adding additional value to your products, whatever.
Steam achieved that. GOG achieved that. D2D and Gamersgate did for a degree, Impulse and others didn't up to now.

You could have used the word shitload and my brain wouldn't stop thinking for 30 seconds.

*whisper* In this case, I think you mean consumer or customer. Although you may design/wear costumes too.

I hope the lost 30 seconds of thinking time weren't too valuable.

Darn, I hate it when that happens. Of course you're right.

There are a couple of things that sometimes worry me about GOG's continued existence, mainly the fact that old games are a limited commodity.
There are many old games that are good and that could keep GOG selling them for many years, but eventually the pool will run dry and they'll have to sell games that aren't so old (which is already happening). These not so old games are already being sold in other DD sites and it's pretty much like coming late to the party. They're easier to run on current machines and it's easier to get a hold of the IP owners, but chances are likely that by the time GOG sells them, most of us will already have them on our machines and they won't sell as well.
Finding very old gaming gems is the opposite. GOG gets to be pretty much the exclusive seller of very old games no one else has taken the trouble to get running. In these cases, GOG gets the most profits I guess, but these games will get to be fewer and fewer as time goes by. They're also the hardest to get running and the hardest to find out who the current owner of the IP is.
My fear is that some day GOG may run out of old gems that can run on modern systems and by the time the new games start getting old enough for GOG, everyone will already have them. Their only hope is that newer versions of Windows won't run XP games at all and GOG could somehow get those running in Windows 8 or 9.

Lots of DD services have exclusive titles. That is why half of them get started. The publisher doesn't want to use Steam or Impulse, so they make their own. Impulse is probably just the biggest one that started along those lines.

He was 30 seconds away from curing cancer. Now he has to start over. Nice work, Shakespeare.

We share a similar concern about GOG's long term chances of survival. Posted this question late last year when I realized GOG had become my primary source for games.

While playing Medal of Honour? Now that's what I call multitasking. Making science fun! :P

Digital distribution services aren't in any immediate danger because their operating costs scale very well. With few real investment risks compared to retail, the only concerns are having sufficient server resources to keep up with demand and selling enough copies to keep the publishers happy. Publishers' expectations are probably very low in this regard, because digital sales are basically continuous free money for no further work on their part--unlike retail, which requires investing in a new run that might sell poorly--so even a small trickle is desirable. This is especially true for DOSBox- and ScummVM-based games where the responsibility for maintaining compatibility with future versions of Windows falls entirely on the emulator authors rather than the developer or publisher.
GOG won't run out of games in the foreseeable future, especially since they are strongly considering adding console games.
Additionally, DRM is a major consideration with modern games (especially since some DRM systems will become incompatible the next time Microsoft makes a major architecture change), so many existing owners would be quite happy to buy a copy from GOG and never have to worry about these headaches again. This will become especially prevalent once activation servers inevitably start shutting down, leaving you with a $50 coaster (unless you bought from DD already or use a crack).