I would have thought that these negate the reason for using ARM in the first place.
No one is promoting ARM for the purposes of emulating x86. The fact that some efficiency is lost while doing emulation has nothing to do with why a vendor is using ARM.
We've seen even Microsoft's own ARM laptops chug trying to emulate x86 software
Yes we've seen it chug, and we've seen it run well. There are wild performance differences between workloads. We've also seen Mac do the same thing, except better, eliminating the chug part and demonstrating that emulation is viable for day to day work as well.
Instead Valve should be encouraging games to use some kind of universal binary format, e.g. based on LLVM bitcode which can be compiled against the target platform / runtime prior to download
How? Not technically, but from a business point of view. How do you convince people to change their practices for a niche use case that will generate fuck-all in product sales? Maybe this is actually their end goal, but emulation has to be the stepping stone or the entire industry will write you off not so much as an "also-ran" but a "never-started".