Not to take away from Microsoft's achievement (and commitment) here, but of course much of that is dependent on remote servers to supply the necessary patches, or in some cases going so far as to just treat the original disc as a DRM dongle that enables an entirely image to be downloaded.
This is backcompat that allows you to play titles from the last twenty years right now, and that's still a huge improvement over anything Sony or Nintendo have done in the last generation or so [1], and reflects the degree to which Microsoft sees that as a killer feature of Steam. But it's not super likely that this will still work in another twenty years— the only archival-quality solution is keeping the old hardware working or hoping for the best with emulation.
[1]: But do note that a Wii U can natively play Wii games, and can be jailbroken to natively play Gamecube games, since all three systems are iterations of the same underlying platform. The launch versions of Nintendo's handhelds always supported at least one prior generation of game card/cartridge as well. And of course the initial "fat" SKUs of PS2 and PS3 could both play the generation of games immediately prior— and none of this required internet access.
PS3 had a shaky launch precisely for that reason, it launched at 599. The PS4 launched at 399 (a hundred bucks cheaper than the Xbox One btw and one the reasons it got a massive lead since the beginning)
Meanwhile, Sony's missing many landmark titles from two generations, and your only option for playing PS3 games on a PS5 is streaming.