When Proton started, it was kind of a joke, killed the Steam Machine idea in large part because the game compatibility was so limited. A decade later, we have a multi billion dollar handheld PC market lead by the Steam Deck, a Linux handheld that can play tens of thousands of Windows games without issue, in some cases with better performance than their native platform.

Proton's existence did not overlap the existence of the Steam Machine program, like at all. Proton's initial release was on the 21st of August 2018. Steam Machines were first released in 2015 and had been delisted from Steam entirely by April 2018.

Wine existed back then, sure, but Steam Machines didn't benefit from DXVK, VKD3D, or any of the myriad per-game and gaming-oriented tweaks that Valve and Codeweavers have made to Wine in the version bundled with Proton. For most people, the prospect of using Wine on a Steam Machine was a huge pain at best. Valve's official position at the time was that they were helping pay for Linux ports of games.