Incidentally, these two paragraphs contradict one another. According to the first, Chris actually did just decide to take their toys away, to see where the players went with it. So there wasn't really anything more going on there.
I'm not saying that's necessarily a bad thing, but there it is.
Good point. What I think he was saying is that true, he did purposefully take the ship away. However, it was never his intention that the ship was absolutely gone for good, nor was it set up so that the only way to get it back was to make a deal with a devil. In fact that entire idea was thought up by the player. What I think Chris was saying in the second paragraph was don't just take the toys away without any possible redress.
[MENTION=3820]Barastrondo[/MENTION] Excellent point. I am fully in agreement with the idea that the dice should decide the outcome. I think its fair to at times give the PCs rather long odds but you are right you don't simply say "Y'all are gonna die now." The more I think about it, the more I think its just a really bad idea to force their hands. Sure, set up a scene where there's a good chance of something bad happening, but at least give the PCs a chance to prevent it. Don't have enemy forces take over and destroy their stronghold while the PCs are off adventuring. Instead, hint or even flat out tell them, that there's a horde of orcs near their stronghold while also telling them that their current adventure is crucial to the security of the region/nation/world/whatever.
In that situation they have a choice. They can go and defend their stronghold with the risk that something bad happens due to them not finishing off the adventure. Alternatively, they go on the adventure and risk losing the stronghold. Now, this is a classic example of a putting them between a rock and a hard place, but it also gives them a chance to come up with something creative. Maybe they even think of a way to accomplish both tasks. If they don't accomplish both tasks though, then they have to deal with the consequences of their decision. Still though, if they go on the adventure and their stronghold is destroyed or captured, give them the option to reclaim it or to rebuild it somehow (without it necessarily costing them future treasure parcels).
In sum, I guess if you have Chris Perkins' reputation you may be able to get away with it regardless, but for most of us, if we haven't really developed a strong sense of trust in the social contract, we are at best, playing with fire. It may well work out really well, but as others have said it could also very likely blow up the campaign.