Valve quit crying because they got bored with SteamOS. A major problem with Valve's "flat" model of no bosses and no structure is that they only work on something if they find it interesting. Once they get bored, it languishes. Half Life 3 is a great example. There was clearly more story to tell, they left it unfinished, and there is clearly market demand for a sequel to the point it would be virtually assured to make money. So why hasn't it happened? Because they aren't interested in it right now. It's not a business or creative decision, it is that people are playing with other shit.
Valve is now fascinated with VR and eSports so that is where most of their energy is going. They are the shiny new toys they like, until they change their mind and chase something else. So SteamOS is in the same general boat as Steam itself in that they work on it a bit and maintain it, but there isn't a lot going on because there are few people interested in it.
Also I think they thought that SteamOS and Steam Machines would be like Steam itself: minimal effort on their part and people would just flock to them and use them in droves. Instead the market has responded with a resounding "meh". They'd need to put in a lot more effort to have a chance of making it happen and they don't want to do that.