kinggraves :
One of the main differences between a "PC" and a "console" is the OS. A console OS is generally more single task focused, whereas Windows was built for multitasking. The key to a "Steambox" is not the box (hardware) but the OS running that box. Due to Linux's open source nature an OS could be built with it solely to play games, in this case solely to run Steam. With Steam as the only accepted platform the drivers can be specially written by Valve to cooperate with their software. In theory this should be a winning situation for everyone other than MS. Game PCs could skip the Windows license and use an OS that maximizes resources towards the game. Valve would funnel business directly towards Steam as the primary PC gaming platform, cutting down on competition from others selling PC game licenses. Assuring they remain at the top alone is enough to justify having to maintain a full OS instead of a client, and compatibility could be guaranteed by only licensing certain hardware setups for the "Steambox".
Basically your describing every console OS thats already out there, the only exception being that the Steam distro, which is basically what MS already tried to do with the Xbone. I don't really see this steambox being on par with the other consoles price wise either, they'll want to put in hardware that will appeal to PC gamers, which will be expensive. Console gamers have already spoken out against the very steam-like DRM that was going to be on the Xbone, so they probably won't go for it, not to mention that it looks like its going to be released in a year or 2, right after the next gen consoles are already out there. Like I said, I just don't see it.
Now, if your talking a Steam OS that I could use to dual boot my system solely to play games on, well, that might be something, but personally, I don't care for the Steam software, I have had tons of issues with it freezing up, dropping connections, the voice system is a little wonky, so I don't have a lot of confidence in Valve building something like that.