I think it will really depend on whether the traditional M+KB can be truly emulated by that new fangled controller they are designing. If it works well I can see PC gamers (myself included) moving to the living room to play. I don't think this will convert many console gamers at least initially so Valve will definitely be relying on its core audience for its early success.
The Linux based OS, while unsurprising as Gabe just has a distaste for Windows in general, might be a problem as those games that have no Linux compatibility must be streamed from your windows based PC to the Steam Box/Machine which is just not optimal, but we'll have to see how it works since we are heading that direction all across the gaming spectrum.
Then there is pricing vs. performance. While any PC can be used there will be a need to have that dedicated Steam Box. You can have a dual boot PC but then Streaming games becomes an issue so the cost of these will come into question. Not a lot of people will want to spend money for an extra PC to play games on when they already have one. SO there is a catch 22 there in terms of cost vs compatibility.
It will be very interesting to see how this shakes out. I was not in the least interested until I saw the new controller design they have as it looks like it could bridge that gap between M+KB and controller.
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