Valve decided to put an end to gambling in Team Fortress 2

til people gambled in a hat simulator

Yes, people gamble tf2 hats and can potential win thousands of dollars from it, they've done in the past and they still do to these day. Hats can be sold for paypal money and just like that you now have money to use in real life from an expensive virtual hat.

Valve is only banning gambling sites because they got under fire for not doing anything while they were still around. They didn't care that the majority of gamblers are kids who can't comprehend loss like an adult can, and they quickly get addicted with this virtual gambling by wasting their parent's money.

The people who do win tons of stuff, are usually short lived. Most aren't smart enough to cash out and never gamble again, they just continue to gamble like they think that moment of luck will happen once again, and they will lose all that money they won.

I know that because there were numerous reputable people on tf2 that had a full history of risky transactions with people and they were deemed very trustworthy from all those months or years of reputation they built. They try their luck with gambling, and when they get addicted and loose like half of their backpack, like the dumbasses they are, they take advantage of their reputation by scamming people and run away with whatever they can get on paypal, never to be seen again. Same thing can be said on CS GO.

Some sites closed, other are still running their "activities", my guess is that valve received another complain and they had to show they are doing something about it.

About the moral controversy, tons of game including many of valve but I could name many popular apps even for phones have crates, chests, cases that are essentially gambling.
Where you want to draw the line it's just a matter of terminology.

nice

good