I don't see this selling all that well.
The design doesn't seem like something that will have the mass appeal the Switch's design has with the ease of 'switching' game modes as well as the detachable joycons. The look is also less appealing. I get that they want to say it's a portable PC, but it's bulk is giving me Wii U gamepad vibes.
The price is going to be a tough nut. It's lowest-costing model is $50 more than the premium Switch model, but that's going to be compared more to the $300 base Switch, not the OLED model. The $529 model is going to make the $350 Switch OLED look more appealing to the general consumer.
My guess is Valve is courting the high-end PC gamer market, the guys who spend fortunes to build their custom rigs to be as powerful as possible. But I'm not sure it's powerful enough for that. The RAM is astounding and on par with current gen, but the rest of the specs are still decidedly last-gen, meaning it still won't run current-gen games as well as an actual PC or the current-gen consoles and will have problems similar to what the Switch had with PS4/XB1 games, and I'm not sure the PC master race crowd would settle for something like that even if it's the most powerful handheld ever.
There is a pretty good market in the PC gaming industry for handheld PCs. It is why GPD Win 3 and Aya Neo which are handheld PCs that cost double this for much weaker specs are so successful with every iteration. If there wasn't a market for it, those wouldn't continue to sell.
Now will this be a switch killer? I highly doubt it will reach anywhere near those levels. But I wouldn't be so quick to think something like this wouldn't sell well enough to meet Valve's expectations. While current gen consoles are obviously significantly more powerful, they are targeting 4k resolutions where as something like this is targeting 720p. Steam Deck also has RDNA 2 architecture and Zen 2 based CPU which means it will support all the new technologies and engines going forward. So while it won't be able to play new games anywhere near max settings, PC games are flexible enough to have different graphical options.
PC has always been about being giving people options. It's why we have desktops, laptops, handhelds and etc that can all play games. Even the best laptops are nothing compared to a Desktop with a 3080 but those continues to sell every generation. This just fills a hole in the handheld market where instead of spending $1000 for a meh PC handheld, people can now spend $529 for a much more powerful handheld.
The main attraction for something like this is the ability to play Xbox, Sony, Nintendo (via emulator) and PC games on the go. That is something the switch won't be able to provide.
PC Specs: CPU: 5950X || GPU: Strix 4090 || RAM: 32GB DDR4 3600 || Main SSD: WD 2TB SN850