Sony's digital pricing has been incredibly competitive for a while (The first season of Walking Dead was like $2 for PS+ member recently, less than it has ever been anywhere on PC) and PS+ is a better value than either Steam Sales or Humble Bundles offering 60+ games a year for less than $1 each. If you add up all the PS+ games just for January at the cheapest they have been on PC you'd have spent over $30 (not including the Vita only game), which is incidentally how much I spent on my most recent year of PS+. Amazon also sells PSN codes now and are already price matching competitor sales for them.
But all of that has little bearing on PS Now which is more akin to a streaming alternative like Netflix compared to buying digital movies from a service like iTunes which is the Steam model (frequent discounts notwithstanding). I don't know that I expect PS Now to offer "first run" games. Instead it will primarily be a game discovery service that offers access to a large selection of titles from the PlayStation back catalog. It will also offer many games that never made it to PC, and let you play them on many devices that don't run Steam at all. We don't know nearly enough to pass judgement at this point, of course, but I could see it being a super-compelling service at a reasonable price ($10-15/month) for a good catalog (several hundred titles).
