When STEAM was first released I was also skeptical. The application always had to be running and STEAM itself was very restricted. It broke many defragmentation programs and disk utilities as they would stall when they tried to defrag the STEAM files. However STEAM has matured and now allows you to defrag the files, and while the application still has to be loaded it does offer an offline mode. Valve also polished it up with a plethora of features and functionality which goes well beyond that of say XBOX Live and it's free. Not to mention Valve seems to have the best deals around and is always offering special promotions on various games new and old.
There is also something else I want to bring up here and that is the consoles. Currently PS3 is the only console that features STEAM. The reason I bring this up is that currently many smaller development studios and indy developers are having a hard time supporting their products on the consoles due to certification costs. Even big publishers like Codemasters are only able to provide limited support to their software because of these hidden costs that most end users don't even know about. Not only do the patches that the publishers put out cost money paid to Microsoft and Sony but they are delayed as they go through certification with their respective owners. The problem here is that it doesn't allow a cost effective way to support the software which is becoming even more and more complex, up to 25Gb or more. Even when the money is put forward to support the product on console there is a delay in getting the patches to the consumer.
This has me concerned with Games on Demand and the Sony Online Store and the future of consoles in general. In a perfect world it would be fine to sell the first party or in house software via these distribution channels. However selling all the 3rd party software at a more expensive price on Games on Demand, then making the publisher pay a fee to support the product with a patch is rediculous. It also prevents MMO's from showing up on consoles or any other software that requires frequent updates like *cough* Blizzard games. Ever wonder how much Bethesda had to pay Microsoft to provide all the Skyrim patches on XBOX? LOTS! Well at least until they cut a deal to add Kinect support that is...
If Microsoft and Sony don't approach the next generation and resolve this issue I can see more and more developers switching platforms and moving back to PC. STEAM in my opinion is the only 3rd party vendor that really offers a solution to this problem. That said I want to see STEAM on all the next generation consoles. Why not let developers sell direct and support their products on the consoles and not just PC? We would see better support, more games, and more kinds of games in general. Civ 5 anyone? Galciv 3 anyone?
We are also starting to see more and more multi-platform sales. This could also evolve into a PC/console relationship if done right. You buy the game and play it on whatever platform works best for you. Again STEAM is the only viable option here and for many reasons. As a consumer it makes more sense to support STEAM and as a publisher/developer it also makes more sense to support STEAM. Paying for XBOX Live and these premium console subscriptions is just not worth it. Especially with all of the issues I posted above. You pay more and you get less. I don't know about you but I want to encourage people to make better games and to be able to buy them at a better price.
I would also like to add that given the current situation Valve is currently in a better position to build a better console then say Microsoft or Sony. If you can mass produce the hardware for cheap and provide next gen power with STEAM in the box then the battle is over before it even begins. I wonder why there is no more wired XBOX controllers hrmmm....
/rant off and good post Frogboy.