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.
To your points:
1. Agreed, no one is expecting anything else from this.
2. As a steam user, I have never run into the $10 AAA title. Maybe 2 years old stuff is that way, but then only if it sucked to begin with.
3. This is mostly correct, but that actually would support the idea that the Steam boxes will fail. Most users don't want to buy a special box/pc to play games, they use what they already have. So, why would they bother to buy a special box that is more complicated to learn and won't have all the same stuff as a regular PC?
4. Steam is well established, but only with people outside the casual crowd. Most casual gamers are more interested in IOS or Android apps. Still free and very cheap.
Most 2 year old games are $10 or less in sales. And you don't have to wait that long, Tombraider was on for $12.49 just recently.
It all depends on price wether the Steam box will be a success. Sure the average user is not going to fork over $600 dollars to have dedicated box under the tv.
The point of the whole thing is to make it less complicated, why would it be more complicated then a regular pc? It appeals to me for 2 reasons, it's not associated with work which a pc is for me, and I would expect that everything that runs on it will have been certified for use on TV with a controller, like a console. No need to find and copy ini files from the web to get Anti chamber to use a controller, or get stuck with a horrible control scheme in Mirrormoon for example. (fun game though)
I don't know if the casual crowd doesn't use Steam. Do casuals only play on facebook and mobiles?