I think Valve is really overreaching with this Steam Machines thing. Their approach ("we're Valve, we're awesome!") doesn't really cut it for me. They haven't done anything to me that proves that there is a demand or any need at all for a Steam Machine. Worse, they don't seem as though they feel they need to prove it.
If it fails, they probably won't care, since it's a drop in the bucket for them. But in order for the initiative to succeed, they will need tons of support from OEMs and software third parties. And they *will* care if it fails...