I don't think that this will catch fire as much as some would like to think. I can't see a Valve system catering to the casual gamer nor do I see it catering all that much to non-US gamers. In other words, I think that all this will accomplish is splitting the 360 market between Microsoft and Valve and possibly sinking both in the process.
You know I actually started thinking this same thing today when talking to a friend. At first I was like "Cool!" But when we started talking about it we kinda started thinking it may not work.
Because some are saying that it will be all Steam Based meaning you will not buy actual physical copies of the games. Right there having pure digital download would really alienate the masses, most go to stores to find out about new games, and go up and down the isles to decide. Also 4 consoles may just be too much, I think in this industry three is pushing it, but four just would split certain markets more.
Since it is more open source, and will allow for people to download mods/maps that users made will people like Acitivison and many of the other big companies actually be okay with that? Because it would destroy their DLC sales. Which I am all for, but the big companies may not make games for it then, Acitivsion/EA and many of the others may say no we won't bring our games to it.
Also it is still really just a console, they use the word PC because I think they are trying to get Steam to be the optimum thing for PC users to use. It really is still as Gabe put it more open then current consoles but not near as open as PC's.
This will hit more of MS then it would anyone else, That was MS's ordeal, bring in PC like games to the console world (mainly online) and they succeed with that. Halo was proof that they brought what was mainly just PC to the console market.
The more I think about it, the more I think it could end up really not selling that well. Especially I wonder what the price point will be?