For those with OCD and like a clean Steam Library, or those who are so fed up with a game's presence they want to banish it forever from their account, Steam has quietly introduced the option for users to delete games they own.
Note: Screenshot altered to highlight new option. Also: do not delete Shower With Your Dad Simulator 2015: Do You Still Shower With Your Dad. It's hilarious. Consult a doctor before using. Yes, that is a real Steam ID.
Discovered recently by a NeoGAF user, the option is available in the help menu of the Steam client. Clicking on a game you own brings up a page where "I want to permanently remove this game from my account" now is an option.
Steam will then ask you to carefully review your decision and then click "I want to permanently remove this game from my account" to do so. Checking that option doesn't just pull it out of your Steam Library — it deletes your ownership of it, so think about that carefully.
Note: If you're serious about doing this, be sure to uninstall the game from your computer first. Otherwise, to completely remove it from your PC you'll have dig through your computer and delete all of the files yourself, as Steam will no longer be able to do anything with that game.
Deleting games doesn't result in a refund (nor does it remove it from one's playing history, if that is made visible to others) Why would anyone do this? Well, some folks like a super-tidy library, I suppose, and there are a lot of unwanted games that have come in bundled purchases.
Others, probably most, are fine with having everything permanently and sorting that list by any of the filters provided in the client (such as "Installed" for example, which only shows games on one's PC). Some, however, might be so angry at their experience with a game that this act of protest brings them closure. Who knows.
It's unknown when this capability was added. Patch notes for the Steam client going back to August do not mention it.