Interesting concept. For many reasons.
1) The Steam machines will have better specs than Xbox1 and PS4 from scratch, and unlike Xbox1 and PS4 the hardware will continue to evolve during the next ten years. In five years even the low end Steam boxes will be many times more powerful than the Sony & Microsoft consoles.
2) They're fully fledged computers, they can do everything a computer can.
3) Unlike Xbox1 and PS4 they will support 3D headsets like the Oculus Rift.
4) Unlike Xbox1 and PS4 they will support 4K resolution.
At the same time both the XBox1 and the PS4 have failed to generate the excitement their predecessors did. So the Steam machines are not badly positioned, and they will be much more capable than the competition but, since they're not subsidized, also significantly pricier. Not sure how that'll play out, the console market is traditionally very price-sensitive.
But the really interesting thing is WHY this happens. Why are PC software suppliers plus a bunch of high-end PC gaming hardware manufacturers releasing Linux-based consoles?
It's no secret that Valve was very unhappy with Microsoft's plans to lock up Windows, and for good reason: forcing all software sales to Microsoft Store will kill third party suppliers like Valve and Origin. High-end hardware manufacturers, on the other hand, are dissatisfied because Microsoft wants to shift consumers to low-end portable hardware. Not much profit for Alienware in the slab market.
In a very real sense this is a rebellion against Microsoft, and, at the same time, the last stand of the stationary PC. I don't know if this will turn into the Battle of Blood River or Masada, but the battlefield will be the living room: are people prepared to pay more for a console/media center with higher specs? And what will Google make of this? The Steam machines run Linux, it's just a hop and a skip from Android/ChromeOS -- compatibility could be fairly easy, if Google wants it.
All will depend on if the Steam machines can get sufficient "critical mass" to start making home gamers switch to SteamOS. The only reason I run Windows on my home machine is because of the games, and I think that's pretty common. If gaming gets better on SteamOS I will switch in a heartbeat, not least as Microsoft has screwed whole kennels of pooches with Windows 8.