Can it ? In my experience, once Steam is aware that there is an update, you cannot even start the game before updating, even in offline mode... but that was some years ago, maybe this behaviour has changed ?
Yes, that is an annoyance. I think that Steam should put more pressure on developers to make old versions of their games available. I am glad that the software support is there (even if the UI is buried; it was originally intended to support beta–testing programs, complete with passwords to unlock the beta releases), and that developers sometimes use it, but I wish it was a formal requirement for publishing on Steam.
(Don't use Steam.)