Since we launched Steam for the Mac a little over a week ago, one of the biggest complaints we have gotten is that we put game content into a "Steam Content" subfolder in the Documents folder. This interferes with how many of our users backup their files, who want to be able to back up their entire Documents folder with Time Machine, Dropbox, or some other software, but who do not want to back up all of their game content. Additionally, many users simply don't like seeing files they don't directly interact with in such a visible location.
So we thought we'd take a moment to tell you why we decided on the Documents folder in the first place, and what we plan to do about it.
Our original inclination was to put game content under "~/Library/Application Support/Steam", along with the other support files Steam uses. The problem is that uninstalling an application is meant to be as simple as dragging it from the Applications folder into the Trash. However, uninstalling Steam this way will leave all of your game content on the drive, which could easily be quite a few gigabytes of wasted space. Our solution was to put the content in a very visible and often used location so users could easily find and delete the game data if they didn't want it anymore. That's right, we chose the Documents folder specifically because it was visible and often used -- the very reasons users don't want it there.
We've taken your emails and forum posts to heart, and we've come up with a different solution for users who uninstall Steam. We are working on adding a feature to Steam to detect when you drag it to the Trash, and ask you if you want to delete your game content files as well. This will allow us to put your game content in an non-intrusive location. In an ideal world we would let you choose where the game content files are located, and in the long term that is a goal of ours, but due to architectural issues with our engine this is not as trivial as it may sound.
As soon as the feature to help users uninstall Steam completely when they drag it to the Trash is complete, we will be moving the game content folder into "~/Library/Application Support/Steam".