> But again, why is this an issue here, when most people using Steam from their desktop computers probably don't use encryption either.

Encryption is important because of how portable the device is. I've never lost a gameboy/DS/switch, but I know plenty of people who have. It's bad enough to lose your games, but if you're doing non-gaming things on the device it's a problem. It took a while before Valve added a pin to protect your device too, but they have.