2 potential reasons:

1. GFWL is mediocre compared to Steam. Valve are effectively creating a game platform which is indirectly in competition with the consoles. They sell games and get license fees, run community features similarly to Live and PSN for free and support mods whilst tying the games you buy to your account so you can just download and play your games anywhere. It's not big enough yet, but as MS have left a gap in the PC scene for the 360, they may fear that Valve and Steam can effectively form a monopoly on the PC & digital downloads section of the market. In doing so they may eventually become a direct competitor to their console business. This can also be very bad for MS if (a big if) Steam eventually supports streaming as it'll make their console hardware redundant.

2. Linked to 1, Steam has recently started to support Macs. They may be worried that this could give Apple more games support which could in turn lead to Apple having a greater marketshare.

These may seem silly but this is the company who entered the console market due to the distant threat Playstation had on PCs by bringing a user friendly computer into the living room.

I haven't played Metro 2033 so I can't comment on that particular case, but my experience of multiplat games on my 8800GTS is that they tend to look better than there console equivalent. Even the games that use the same textures, I can usually up the AA and AF to higher than on the consoles. As for Crysis, I can run it 720P with most effects on high, some on medium and get a frame rate of about 30fps. It dips below 25 every now and then but it's still more impressive than anything on consoles currently.

Note that I'm running under DX9 with Windows XP. I haven't upgraded yet because I know Vista and Win 7 take up far more resources.

Pretty much the exact same situation as me.  I bought a 8800 GTS about 30 months ago for $360.  I also stuck with XP and get better performance at higher settings than the console versions.  A bit annoying being stuck with DX9, but I'm planning a new build for sometime this year.

we all have gamespy, the problem is to get borderlands working correctly online, it was the most stupid shit I've had to deal with in many years. I ended up having to open my computer completely to the outside so my friends can actually connect to me.

The only thing I'm worried about is the game being pirated, affecting sales

Wait a minute, how does Steam get publishers to sell their games on their sharing site anyway?

First of all I am not surprised you get banned once a week since you are rude and completely lack human decency when posting.

Secondly, the bolded line applies to you here as I know for a fact that a stock GTX260 dips under 30 frames per second any time you have heavy gun fight with 5-6 dudes or are outside with a gas mask on. This is on high (not very high) and at 1680x1050.

And 9800GT is about 2 grades lower than a GTX260... With an 9800GT, I know that when you are in a tunnel walking with a buddy you can get up to 60 FPS...but when you go outside...heh not so much. Im guessing you lower the AA and are still most likely seeing frame rate drops in the low 20s (10s on Crysis) when the action heats up. Im sure its still quite playable, but with all those compromises, does it really "blow away" the consoles? Also, how would you know what Metro 2033 looks like on the 360?

But hey, I could be wrong and youve must have overclocked your card and are cooling it with liquid nitrogen or something...

You are right there was a time where my game slowed to a crawl under 30, and that was only during the amoeba glowing balls in the silo. For some reason when they blow up my game would just stop. However other than that the 9800 GT devours the game on High. No slow downs aywhere else. I did average 15 FPS on the intro level once I made it just outside the tower on Very High but on High it was still over 30 FPS. I also neither overclock nor super cool it. Something must be worng on your end though, from the sound of it.

As for how it looks on the 360, my roommate finally decided to play it and he doesn't get enough time on my PC time to do any serious gaming anyhow. The game looks absolutely pathetic, have you seen the textures? I didn't take a close look, but the the post-processing effects were also very pathetic.

As for the bans, it's because I say that games this genereation are pretty shitty compared to previous generations, especially shooters compared to shooters on the PC.

I am very sceptical of Steam being any competition to consoles or MS, but if it is true I hope Microsoft will response to this thread.