It can't be skinned to suddenly have a huge library of AAA games like you can find on a Windows-based gaming PC. How do you skin Linux to do that?
The problem with your above post is that there is a lot of "imagining" required to get to the outcome you desire. Since we are talking in circles here, why don't we revisit this thread in a year or two and see how the SteamBox rocketed to success? My prediction is that just like other similar attempts (at Linux gaming), it would once again be a big fat fail.
I wonder what OS the Wii is running? It didn't have a lot of games when it first came out but it sold like hot cakes for several years. Nintendo tapped a market that didn't exists before the Wii came along. Maybe the SteamBox can do the same.