I hate to put it this way, but I think Apple has already proven that the best strategy for closed hardware platforms is to release incrementally improved hardware on a regular release cycle, and mandate that software be written to APIs and not "the metal" so that it remains forward compatible. In a world where so many people happily replace their 100% working phones with new ones every year or two, I don't really see why most of the current console market would have a problem with purchasing a new Steam Box every few years.
Valve could easily stick $200-400 commodity PC hardware in a box and blow the pants off of the vast majority of the existing console market that is currently enjoying games running on hardware that was state of the art in 2006. Even if the PS4 and Xbox720 (or whatever they plan to call them) come out later with superior hardware, I think most of the meaningful difference can be made up by carefully cooperating with NVidia/AMD to optimize the drivers for the specific models of GPUs used in a limited range of hardware, while aggressively promoting the yearly hardware refreshes.
It's possible that Valve could end up playing the console game by its established rules, but I think they'd be wasting what is probably the best opportunity available to anyone in the industry to become the "Apple of the living room" if they did -- lord knows why Apple itself isn't trying harder on that front.
A big gripe people seem to have with consoles is that the hardware limitations due to slow release cycles prevent games from advancing. How is Steam going to continue to put games out quickly?
Are they selling it as a PC that I could also use for word processing or programming? This might help justify a higher cost. But then, I'm not putting it in my living room and it's not really competing with consoles. Perhaps I'm missing something here.