I agree that the steam machine was too early.

I don't know how it could ever start from zero without having to go through a growing stage. I think it was just necessary to have modest expectations, and so far as I can tell, valve partnered with third party vendors and didn't lose $$$ on it.

Moreover, the downstream effect has been to set the foundation for the Steam Deck, which has been a smashing success. It just takes time to build up a mature ecosystem.