Valve would actually be saving the PC gaming market, as all those games will typically be on PC Steam as well!
Todays typical console business model from the big 3 is growing old, and frankly I'm tired of getting gouged. Valve will bring a breath of fresh air!
Put a lot of those cheap Steam specials on a Valve console, and they will come, in droves... allow you to play games elsewhere at friends based on steam login, and uh, you get the idea....
Nintendo, Sony and Microsoft would have to change their pathetic gouging business model completely in order to compete with Steam...
I'm sure people would buy the Steam console just to get brand new games on release without having to leave their couch...