You can add non steam games to steam, and that this is a common practice among people that use steam. Doing so with this game, breaks the game.
Launching the game directly from the executable has worked for other games from other vendors, but yes, updates are expected to fail b/c launcher is gone. This is the only game that I've paid money for, that I am forced to use the 3rd party launcher every time.
Again, I have no issue with getting updates through the supplied launcher, but failing to login because I didn't use the launcher? That seems like a bad way to handle the situation. If the game needs updating, then stop the user as soon as they launch the game (Hey, the game is X, your running Y, exiting game, report that into some log file somewhere etc) I have no idea what bearing the launcher has on connecting, but that seems like a needless dependency.