I'm really excited by this. I've always thought of gaming as one of the things really holding linux back from taking a more reasonable market share on the desktop (I said one of). Even people who prefer linux are forced to dual-boot or use a VM. This certainly isn't a magic bullet, but I sure hope it makes linux a more viable and mainstream choice.
I would argue that your hopes would be better served by Unity Engine[1] and Mono[2] than by Steam. While high-budget releases have almost completely ignored the Mac and Linux platforms despite Valve's effort, the popularity of those tools has brought a very large number of mid-tier and indipendent developers to publish on them. While they are not as popular, they still help to make them look a little bit less like a desolated wasteland of work and productivity. :)
Let's also not forget that those same high-budget productions rely heavily on the current set of graphics (and audio) drivers, and there is hardly any effort to bring the Mac and linux up to par on that front.
The problem is as far as I've seen: people don't shift 'just because' or even when the other option is 'slightly better'. In fact, Linux is going to be a sub-standard choice for gamers for a good amount of time even after steam for Linux catches on with the Linux community. The Windows games that people already purchased aren't going to vaporise there's a lot holding them back to the old platform.
People will install Linux enmasse when Linux gets something that the other options don't have -- when desirable games come out that can ONLY play on Linux and no other platform.
I'd be a bit more optimistic than that. It's not unusual to meet technically minded people who use Linux for getting stuff done, but dual boot Windows for gaming. If enough games are available for Windows, that's going to increase the market for Linux-only computers, which is another key part of the puzzle.
People aren't homogeneous. This won't be enough to make Linux a better option for the majority of people, but it does mitigate a really severe pain point. I've kept my desktop a Windows machine for years because of gaming, but use Linux on my laptop. Now, it looks like the two crucial publishers for me (Valve and Paradox) are going to support Linux, and honestly that's good enough given I sort of wanted to switch anyways. I'll probably keep my other partition around, but I expect I'll be doing most of my gaming on Linux once this is ready.
And the more people who switch to gaming on Linux for reasons like mine, the more companies will tend to support it.
I disagree, Linux only needs content parity. The hook is price. As long as gamers are in a student/lower age demographic price is the main barrier to purchase, and I'd argue, the main driving force behind piracy of Windows.
