Not every game needs a sequel. I agree that a smaller company would have been economically forced into milking the franchise, but that doesn't imply milking the franchise is universally a good thing.
Meanwhile, perpetual testing initiative was a great solution for keeping the game active without requiring active investment from Valve's game developers.
I agree with you in principle, but in this case, Valve hurt themselves by not releasing more games. If they released more sequels to Portal and Half Life, would Epic have released a Steam competitor? Right now, Steam has dwindled to a craigslist-like marketplace of garbage. So just like Nintendo has to release AAA games to keep the Nintendo Switch alive, Valve also has to release AAA games to keep Steam alive.
This is something only Valve could do, because Steam makes so much more money. No other company would leave such a lucrative franchise for so long.