I don't think that their biggest mistake is at all "not doing episode 3 yet." I think Valve's biggest mistake was setting themselves up to do more half life with the episodes and especially the ending to episode 2. I think Valve is best when it's doing crazy, creative and new things. If they hadn't backed themselves into a corner where more Half Life was so strongly expected and wanted, they could have said years ago that they were moving on for the time being to work on newer stuff and (almost) noone would have blamed them for that. Instead everyone's stupidly wound up about wanting the game and meanwhile everyone working on HL3 stuff is under stupidly enormous pressure to make the best game ever instead of just making what they want to make.