I had the same issue as quite a few Steam players today.
Steam appears to update MWO but ends up with a 0 byte file, when you start MWO it tells you there is an update available and you need to update first to play.
The fix I discovered was to delete the local game content for MWO in Steam (done by right clicking on the game in the library),then reinstall the game. This worked for me and I also received all the items from the last challenges.
Verifying the game cache didn't work for me, so hopefully this helps some of you.
Cheers
Edited by Vanibanez, 18 October 2016 - 11:38 AM.
Adding Dev Note