Why does using from __future__ import print_function breaks Python2-style print?

The whole point of from __future__ import print_function is to bring the print function from Python 3 into Python 2.6+. Thus, it must be used like a function here:

from __future__ import print_function

import sys, os, time

for x in range(0,10):
    print(x, sep=' ', end='')  # No need for sep here, but okay :)
    time.sleep(1)

__future__ statements change fundamental things about the language. From the documentation:

A future statement is recognized and treated specially at compile time: Changes to the semantics of core constructs are often implemented by generating different code. It may even be the case that a new feature introduces new incompatible syntax (such as a new reserved word), in which case the compiler may need to parse the module differently. Such decisions cannot be pushed off until runtime.

(For the same reason, they must also appear first in the source code, before any other imports. The only things that can precede a __future__ statement are the module docstring, comments, blank lines, and other future statements.)