1. Valve is going after a market that is already used to all games being digital. There won't be any backlash this time as it is not removing features (trading, lending, etc) that people were used to having. Plus people will expect the cheap prices to continue, as opposed to console digital games that have always been more expensive then a physical copy.
2. Some exclusives will come (HL3?), PC exclusive games might get some extra optimization for the Steam hardware. Anyway it won't matter that much when you can get the same AAA games for $10 or less.
3. The average user on Steam doesn't have a very strong PC and doesn't spend thousands of dollars to keep up with the latest GPU's. The average user plays games on their home office PC or laptop. A simple box to put under the tv would be appealing to the average user.
4. Steam is a very well established name and already offers many of the features of psn and xbox live, for free.
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