The only case I know for certain that Valve removed a single game from accounts was the time a large number of Dirt 3 keys were leaked from a graphics card promotion. A friend traded a game for one of the stolen keys, not knowing about the leak. About a day later, the game disappeared from his library with no fanfare. He didn't even get an email from Valve.

I've also heard that Valve will remove games that were acquired through the trade system if the original buyer obtained them fraudulently.