I like the server concept. If it's just a small PC, I see how that is sort of pointless.
I would like to see steam box something ambitious like, "Half-Life 3, developed exclusively on Linux/OpenGL, and distributed over SteamBox" and then see what happens.
And then if it fails, "Half-Life 3, now for PC, Xbox360, PS3", and they can recoup some of the losses.
PC's desperately need some sort of normalcy from a gaming perspective. The PC Gaming heyday, back in the 90's, there were much fewer options from a hardware perspective, it may have been literally three different choices "budget, medium, advanced", with vast majority having some type of medium hardware, with the advanced kit making the game ridiculously playable.
Now, you have like 1000s of options, tons of different versions of the same hardware, chipsets, all floating around, making it much more difficult to troubleshoot a game before full release. I.E., "This game won't load on my computer" or "I click on the .exe and nothing happens"
But if PC gaming is consolized, will that make PC gaming less interesting in the long run? I don't know, probably not. PC gaming is really not much different then console gaming. You have a developer who makes the game, a software company that distributes the title, and a system which runs the game. The only reason PC gaming is considered more complicated/advanced/nuanced is because it's likely easier to develop on and distribute titles (everything done electronically or as in the past, on a simple burned CD)
A steam box running linux, would still have this open environment, you wouldn't have to "crack" it like you would a PS3 in order to release its full potential.
Now, give yourself a very capable device which is fully open (albeit with a immature form of an OS) and give yourself a stable device which was distributed, I would be excited with what indie or established developers could do with this.