The point everyone who "doesn't get it" seems to be missing is that all the facets of steam OS aren't happening in isolation.
It's not just a $99 box or a $600 box. It's a platform that supports $99 boxes, $399 boxes...as cheap or expensive as you want.
It's a custom OS built from Linux, but steam boxes still support windows and windows games....because it's still steam.
It's not all about streaming, nor is it all about huge expensive boxes in your living room. It's whatever you want it to be. Stream it if you want, from windows or SteamOS. Or put the big box under your TV. It's up to you.
It's still an open platform that supports open APIs like OpenGL in Linux and DX11 in windows for broad compatibility, but AMDs mantle API can bring console-level optimization to it. And that's going to see huge support, because it's just a derivative of the same optimizations they're making for the consoles.
They've got every based covered. They're not aiming at a tiny little market of only people that want to PC game in their living room, or only rich people who can afford $600+ consoles, or only poor people who can't spend more than $99 on a console. It's offering something to everyone, and the flexibility of the platform is a huge selling point to consumers, publishers, hardware manufacturers...everyone. This is an all out assault on the entire gaming market from top to bottom, and the conditions are just right for them to attempt it.