As I said, we don’t know the terms of their publishing contract, if any, so that would be a baseless assumption to make. I could also flip your argument and say they might not even want to sell on Steam, but feel forced to because of its monopoly power. It’s one of the points of the class action lawsuit.

I’m glad we at least have moved on from people outright denying Valve does this to defending Valve doing this.

Why did the dev have to increase the price elsewhere to “match the price”, instead of matching the price to $7 on Steam?

You’d have to ask the dev, but obviously Valve takes 30%, while the dev would get 100% on its own store. If there’s a publisher involved, and publisher contracts often cover specific platforms, the dev would get much less than 70% on Steam.

Comparing Steam to traditional stores is incorrect. Even Valve’s own argument in the same Wolfire case was that monopoly power requires a market share of 75%, which Steam exceeds.

How explicit does Valve need to be for you to agree that they make the point clear? In one quote further in this thread, they say “we’d just choose to stop selling [the game]”, in another, on p. 161, they say “we’ll be ready to release [once you match the price]”, prompting the dev to raise the price from $7 to $14 elsewhere. It’s highly anticompetitive because it prevents other platforms from competing on price. Great discounts are instrumental as well, as noted by OP’s very article.

Funny because they absolutely use those tactics even to this day. Among other things, they go around and tell developers not to set lower prices or discounts elsewhere if they want to be on Steam (see page 160 here).