I think MS is well aware of that, but they probably figured that by the time Xbox 4 comes around in a decade the market will have shifted between now and then. They can't afford to let Steam and potential Steam competitors continue to eat up the online digital retailer marketshare and mindshare. They can't play catch up 10 years from now if they want to be a leader. They want to start developing themselves as a Games as a Service innovator, because they believe there's far more money in it than protecting the status quo. They believe there's a lot of money in being an online retailer, making the margins on games that Gamestop, Wal-Mart, Redbox, Gamefly etc. do through selling, renting, and trading.
They have the deep pockets to take a beating in the early years if it means they believe there's a bigger pay off later AND that it means they are getting in front of potential future threats from the like of Apple, Google, Samsung, Amazon, Sony, Nintendo, and others. After seeing how the mobile phone game market blew up right in the middle of the generation it has to be ringing in their head that they missed an opportunity. The fact that Steam has just thrived and prospered over the last few years has got to be a threat they discuss weekly and something executives beat them up over as a missed opportunity. Games will be a service some day and MS can't just play catch up if they want a big piece of it.