@BitFlipper: Why would someone buy a "living-room ready Windows gaming PC + Steam client" when games that hardcore gamers want come out on the consoles first and in some cases never make it to Windows? I know, I know...someday the Xbox will be running Windows so they'll be able to write an XBox game that can run on Windows too just like you can run any Windows 8 app on a Windows Phone 8 device and vise versa.
You assume that what Steam is building is just a gaming platform to play games that appear to hardcore gamers. Maybe it's not the games that the platform can play but how they are played. Valve seems to provide a couple of ideas along these lines in this article.
Like you said Nintendo didn't have a lot of games when the Wii came out. People didn't buy the console because they new Nintendo was investing a lot in R&D and game development. They bought it because it bought a new experience to game play that was accessible to a wider audience.
I'm not convinced that the Steambox will succeed but I'm certainly not drinking the Microsoft Kool-Aid of "if it doesn't run on Windows it will suck." There are plenty of WinDiv employees that are doing a fine job of chugging that stuff down. I just hope they start mixing it with a splash of vodka for their own good.