Ironically, Xbox 360 seems to be doing just fine being largely incompatible with Windows games. Valve has committed to porting all their games to GNU/Linux x86/x86-64, and they have already ported a big chunk of them and other game development houses are following suit, so there is definitely going to be a lot of titles available at launch, probably more than any consoles had.
But yeah, if Valve does nothing but slap Ubuntu on a PC and put some blinky lights Valve logo on it, I agree probably won't be successful.
Obviously they have to sweeten the deal a bit. The success of this thing revolves around how much they can leverage themselves as a premier game developer. I think Valve should make some exclusive DLC for SteamBox owners at least, if not an exclusive game or two. Definitely have some exclusive SteamBox content at launch. I'm sure they have a few tricks up their sleeves like this.