Our activation has used servers since well before Start8 was released. Unfortunately software piracy stopped the basic serial number systems from being viable about a decade ago. Key gens were just too common.
Hi Neil, thanks for replying!
I understand and by no means was I critical of this. By the way, by correctly employing a certain class of asymmetric cryptographic algorithms, it is possible to thwart pirated key generators entirely (although not serial number sharing, which is bad on its own) even without implementing activation-based techniques. This is still prone to binary patching, but so are activation-based techniques.
Software vendors calculate their risks and make their own choices. True, these choices don't always suit all customers perfectly. That's why my desire of being able to install and use the software entirely offline better resembles "wishful thinking" rather than reality (even though surprises still pop up, here and there). 
What I tried to emphasize in my original post is the fact that it would be preferable to display a warning message during the upgrade procedure, informing the user that a possible reactivation is in order, and that such a process would rely on the availability of an internet connection. I also stated my opinion that it would be preferable to display an error message, instead of proceeding silently, upon a connection failure (all the more so when under such circumstances, the activation status of an application might be reverted). Myself, after a reboot, I ended up with is the traditional Windows 8.1 Start button (an experience I am not used to!
), at first thinking that the upgrade process was not successful. That is, before I launched the Start8 configuration application and got prompted to activate.
I enjoy using your products! Keep up the excellent work you are doing!