Well I wouldn’t call it a debacle, Steam Machines were a good idea poorly executed. Basically, Valve failed to recognise what it was that people liked about consoles, the fact that you don’t have to configure them, you just pop a disk in and get a baseline experience. They ended up just being normal PCs in expensive cases.
The reason I think Steam on consoles could have legs (and I think Portal 2 would have been PS3-era), is that the reason behind Steam Machines was a way for Valve to diversify their business. When Windows 8 came out with its own storefront Valve started to get sweats as they realised how much of their business relies on Microsoft. When your own company relies on the whims of another it’s not a good business model long term. Steam Machines were a flop, but what if there was a way you could bring Steam to console, it might just fix Valve’s problem.