There is one aspect of this project, however, that's badly marring it: The "Steam Machine". Or rather, the options available.
While the Steam Controller is funded and developed by Valve, and is fully their project (as far as I know), the "Steam Machines" are essentially just PC's by different manufacturers. Most of them may come in fancy boxes, but they are still just your regular old run-of-the-mill PCs.
And there lies the problem, albeit a bit indirectly: Because they are just normal PCs, made by PC manufacturers who build normal stock PCs as well, these "Steam Machines" are in no way cheaper than just a regular PC that you can buy anywhere (either pre-assembled, or in parts.) There is little incentive in buying a "Steam Machine" over a regular PC, because there is basically no price difference. In fact, many of these "Steam Machines" may actually be a bit more expensive than if you just bought all the exact same parts yourself or, sometimes, even if you bought an equivalent pre-assembled stock PC.
Moreover, by buying such a "Steam Machine" you are actually limiting yourself to a PC that has Steam OS (ie. a Linux variant) installed in it. It won't actually be able to play every single game available on Steam that's playable on Windows. So it is, essentially, a more limited PC that's no cheaper.
Note, however, that the "Steam Machine" project is still in development (as of writing this), and things may change in the near future. There may be some hiccups now with those machines and their pricing, but perhaps they will sort it out and optimize it in the future. (Although one could present the valid objection that they should be doing it right from the get-go.)
However, that's not the major problem with those machines (nor the main point of this post.) The major problem is the outright deceptive marketing that some of those "Steam Machine" manufacturers are using.
For example, consider this sales speech in one Steam Machine brand store page, about its graphics chip:
"Intel® Iris™ Pro Graphics 5200This is absolutely deceptive marketing language. It deceives an unaware buyer into believing that the graphics chip (Intel Iris Pro 5200) is top-notch and highly efficient for gaming.
The BRIX Pro is one of the first devices to boast the cutting edge graphics capabilities of Intel® Iris™ Pro graphics. Based on the latest graphics architecture from Intel®, Iris™ Pro Graphics use an on-package 128M eDRAM cache that negates memory pipeline issues, greatly boosting overall performance in 3D applications."
This is absolutely not so. The Intel graphics chips are integrated chips that are extremely modest in terms of efficiency, and intended mainly for very basic usage in laptops and non-gaming PCs.
In a current gaming PC, it's fair to assert that a GeForce GTX 680 (or any other card of similar efficiency) is pretty much the absolute minimum you ought to have in order to play modern video games with decent graphical quality. (The GTX 680 is getting older and older at a pretty fast rate, but it can still probably hold its own for a couple of years more, even for the newest games, as of writing this. Therefore if you are buying a new gaming PC, you should absolutely not be content with anything less.)
If we compare the Intel Iris Pro Graphics 5200 with a GeForce GTX 680 using a popular benchmarking tool, the former gets a rather pitiable result in comparison. You can see some results for example here.
In that benchmark, the GTX 680 got 5715 points, while the Intel Iris got 1191 points.
To better illustrate that difference, consider that a game that runs at about 60 frames per second on the GTX 680, will run at about 12 frames per second on the Intel Iris. (Of course the benchmark points do not necessarily translate exactly to equivalent framerates, but they probably are a good enough estimate.) 12 frames per second is beyond unacceptable. In practice you would have to lower the graphical quality level of the game to ridiculously low levels (and perhaps even then it would probably have problems running it smoothly.)
That machine, that gaming PC, is being sold, effectively, without a graphics card. It only has the default integrated graphics chip that comes with the CPU/motherboard (which nowadays comes by default with all CPUs/motherboards.) That chip may be able to run games made in 2005 at a decent speed, but it will most certainly not run games made in 2015.
That in itself is a disgrace for what's supposed to be a modern gaming platform. However, it's even worse than that because said machine is being marketed deceptively, giving the unaware buyer the impression that it's much more efficient than it really is.
Why is Valve allowing this to happen? They would have all the incentive in the world to stop both this kind of absurdly inefficient PCs being sold as "Steam Machines", and even more to stop that kind of deceptive marketing.