I like the "updated DVD copy in the mail" idea. Being able to archive games with Impulse is nice, but it would be less hassle to just pop in a disc. Any idea what this would cost? Will the discs have labels printed on them? I may get one for GC2, as it would be nice to have a hard copy of what appears to be the "final" version.
However, the LAN thing worries me. I have decent internet access at home, but there's only one broadband provider in town and they're determined to spend as little as possible on infrastructure maintenance. The quality of service has deteriorated steadily over the past decade, and the area had several outages in the past year due to faulty routing gear. Additionally, it's hard enough sometimes to get 2-3 computers on my network to talk to each other properly; getting them to do that AND talk to Stardock's servers could be even worse. I've had friends with laptops be completely unable to access the internet here despite having the access key and doing all the troubleshooting and Windows-jiggling we could think of.
Once this custom server thing is released, would it then be possible to play multiplayer without connecting to anything outside my house? If so, I think that would solve any possible connectivity issues as well as the whole "Internet != LAN" debate.
As for needing multiple keys for multiple players: Just a few hours ago I was playing SoaSE on a LAN with my brother, who had only agreed to try the game because it had LAN co-op. About year ago, he played SupCom on LAN at a friend's house and liked it so much he convinced me to get a copy without having played it myself. He doesn't care about singleplayer, and he doesn't normally play TBS games, but he's willing to try them out as long as we can play co-op via LAN. I was hoping to convince him to give Elemental a try, but it doesn't look like that will happen. I understand your reasons for requiring everyone to have their own key, and I don't think it's an unreasonable requirement, but it's still a little disappointing.
The only real way I have seen this fixable is the way Blizzard handled their early warcraft 2 and diablo I think. Basically you need one person with a real copy. This CD would have something similar as an activation for copy protection (YES, Activation is a COPY protection), if you do not provide the copy protection you could only install a restricted copy that would never a real copy as the server. So the guy who owns the game comes to lan and everyone goes "WOHA, Elemental" and he just shares a network drive with a restricted copy, everyone grabs it and connects to his server on the LAN (The only thing they can do with this copy). Everyone plays and this guy does free marketing to you and if anyone liked the game they'll have to ask him to pirate it to them or they'll buy it! This is pretty much the only solution I have to this problem
I've always felt that getting a group of people together to play a game over LAN is the PC equivalent of handing out the console controllers for some Super Street Fighting or some friendly Halolz. I never expect my friends to actually own the game we're playing, I just want to share it with them for a little while. I want to see developers get paid as much as anyone, but asking my friends to buy a full copy of something they may only want to play a couple times every other week is crazy. There's a big mismatch here between the typical PC game business model and the social reality of customers.
Maybe it's too late for Elemental, but I think Heretic's idea is a good compromise. The original Starcraft let you install "spawn" copies that had singleplayer and online play disabled. They could only do LAN multiplayer, and only when a computer running the full version of the game was hosting. This allowed people to play LAN with their friends (and potentially introduce many more people to the game) but still provided an incentive for those friends to buy their own copies.