Nintendo/Sony/MS spends huge amounts of money upfront (and afterwards) to get high quality games on their consoles. Do you really think Nintendo didn't invest heavily into R&D even during the initial time when they didn't have a lot of games? I don't see Valve doing this.
What would be more desirable to a gamer:
A living-room ready Windows gaming PC + Steam client.
A living-room ready SteamBox with Linux + Steam client.
Unless AAA games gets exclusively created for the SteamBox, #1 will always win by a large margin. Not sure how you guys can't get this. Nobody says the Linux fans/ABMers won't buy a SteamBox, but if someone is truly into it just for the games (read: the masses), #1 will always trump #2.