I can only really speak as a consumer, and for me Steam is the best service out there. It works well (for me anywho), is free, and gives you a easy to use store, media, community, etc.
I think Live is very good but balk at the fee a little (not in terms of cost, it's really peanuts in many ways) just because services like Steam are free.
As a developer, well, if Valve are taking the piss a bit then they need to speak out, up and defend themselves. For Steam to work the way it does Valve need the steady stream of content, so the developers ought to be able to come together and sort something out - if there truly is something to sort out in the first place.
As a consumer, I find little beef with Steam. And, as you say, unlike say Live on 360 or PSN on PS3, it has competition right there on the same platform (PC) with D2D, etc.
Actually, saying that, I wonder what he thinks of PSN and Live?
Try to be reasonable... its easier than you think...
