The bottom line is, as long as there are any games that don't get on Steam, the system will be a "failure."
Pretty much, although Greenlight doesn't really solve much. The previous way of greenlighting games for Steam release (send email to Valve -> Yay, you're in, or "not a good fit") was also highly criticized because quite a few quality games, even ones successful on other platforms, couldn't get on Steam. Greenlight appeared as a means of taking some of that veto power away from Valve, but it's again highly criticized because quality games are being left out. As Htown said, I have a hard time coming up with a system that is still curated (so as to leave out the crap) but doesn't let everyone in. If you do let every not-crap game in, then you open the "discoverability" can of worms where quality titles are drowned out by a sea of mediocre offerings.
So what's the solution? I honestly don't know. I have voted on every game on Steam Greenlight and I maintain a reasonably popular recommendations list on the service. Through this process, I have discovered and bought quite a few quality games than I previously hadn't even heard about, so one could argue that Greenlight does at least provide some form of exposure. I also think that some of the games that got Greenlit would have never made it through Valve's old approval process, so Greenlight does have some positive aspects to it.
Here's the problem though: I'm a core gamer, a devoted PC user who actively keeps up with industry news and new game releases, I shop from multiple digital game stores and even I had no idea that some of these quality games existed before they were put up on Greenlight. So for the average user, it's safe to assume that if a game is not on Steam it doesn't exist. That is a huge problem and the more it is allowed to happen, the more indie devs will flock on Steam and get inevitabely frustrated because they can't get in.
Maybe the decoupling of Steamworks from the Steam storefront will encourage people to shop around as everyone will be offering Steam keys, who knows. I assume that in that case Valve will collect a fee from everyone who chooses to use the Steam API but honestly, I just see history repeating itself. Some stores will rise to the top in popularity, everyone will want to sell through them, they won't be able to get in and they'll protest. I really can't see any way out of this loop.