Huh, that'll teach me. I could have sworn that wasn't the case.
I don't have any links on hand or specific quotes, but from what I recall of the situation:
-The five update limit is basically a bonus for customers, so that they don't need to worry about potential issues with getting updates, and makes it easy to reinstall it if they need to or if they actually have a few computers to put it on. Just like the lack of real DRM in the magazines is designed for customer convenience - even though these both mean that people can take advantage of this and share the benefits of their account.
-I recall WotC early on saying they are cool with a family using one account through the household.
-They are less cool with people sharing an account among an entire group of gamers.
-They've also indicated that they don't mean that one person can't show friends stuff on the compendium or help them make characters on his Character Builder - but that's a very different thing from using one account to install the Character Builder on five different people's computers, or sharing your account info with a dozen people to download the magazines and freely use the compendium.
-They haven't done anything to actively stop people from doing such things, but have warned that enough abuse of the system will probably result in bad things happening to the system in the long run, when the lawyers take notice of people's abuse and decide on some absurdly draconian response in retaliation. Basically, if people don't play nice now, everyone loses in the end.
Like I said, I can't guarantee this is their exact view of the situation, but it is the overall sense I've gotten from their comments when I've seen these topics discussed.