No Valve isn't going to get the same kind of retail distribution as Sony or MS overnight.
This is going to be a startup type of thing. And the best they can probably hope for is all the PC ports, none of the console genres.
So very light on platformers, sports games, adventure games and very heavy on FPS variations.
What would make such a product appealing is lower games prices and no online subscription fees -- basically none of the BS that all of the big console companies impose on you in one way or another.
As much as I wish for another actor to enter the market, that could be Steam, I sort of agree with you, it is really difficult for Steam alone to pull that one, they need partners and I mean big partners.
I think it would almost take a osrt of "competitive' collaboration between AMD, Nvidia and Steam to get somewhere. Those three companies needs to free (even lightly) from the grid of the OS makers. I could dream of a world where supporting a specific version of Linux would be a shared effort between those (3) companies, where AMD and Nvidia would have the charge of the drivers development and developers support, Steam would fond the expense to keep the "front end /app store" up to date. Steam would let some of its margins to AMD and Nividia accordingly to their market shares.
There would be clear performances requirements for the low end (perfs requirement, amount of RAM, TDP 100Watts sounds right), all models should be APU/UMA set-up.
Whether you use ARM based (Nvidia) or X86 system (AMD) it would be transparent for the end user (games would use Open GL). The goal from a software pov would be have the easiest port as possible from the PC/PS4 and to end in that next gen ball park as far as perfs are concerned.
The platform would rely on no advertizing outside of the web, light on the web and word to mouth, would only be available online. The lower end would launch when the next node at a really low price without HDD (as geek have HDD in spare and/or want to chose their HDD).
Overall I could picture the thing having few features, mostly a real gaming devices for which the only critical feature is imo voice chat. I would make the OS foot print really light while gaming so the lowest end could starts with only 4 GB of RAM (think 256MB, 512MB at worse).
Like in the ps360 you could call a more full-blown OS but it would not be instant (at least not on the lowest end models).
Without an optical drive, an HDD, a reasonable TDP (@22nm) they could shoot for 199$ for he entry models, like for GPU nowaday every vendors could come with its own flavors (light overclock RAM or APUs, different cooling solution, etc.).
Anyway that is so unlikely to happen that I wonder why I spend the time to post it