It's for the better, I think. Everybody gets so concerned about privacy and then gives Valve a blank check with the Steam launcher.

I almost prefer having it on an isolated system, along with the various other game launchers.

I also wish I didn't have to use it to buy games, but it seems like any/most PC games are available only through Steam, or some equivalently distasteful proprietary launcher/platform/portal thing.

I think it's about company image.

Microsoft has a long standing reputation for bundling crap and bloat its OS, while doing whatever-telemetry and harder to catch as the author of the OS itself.

Valve and Steam has a much better reputation for now, and is respected by many players. I'm not saying it's perfect but at least it's loved by players whereas Microsoft/Windows is more into the hated category, for good well-deserved reasons.

You can run that stuff if on Windows in Sandboxie or if on Linux containerized. For example I run Steam in an LXD container.