The steam machine was good in concept, the problem was that the software was not ready at ALL and the market was too niche. Most people alrady had a PlayStation or XBox for couch gaming and most games back then that were available on steam were not that well optimized for controllers.

They basically built the foundation over the past few years with steam input and proton so they could bring it all together to make an amazing handheld device.

You gotta fail somewhere to be succesful, and valve did just that.