I think you could hit a really attractive price point for a a device like that, and it seems like a compelling device for Steam's existing user base. At least for me, I think it'd mean tossing the Switch into the junk drawer.
Targeting it for playing games locally just makes no sense. It's either going to be too expensive to have any real market, or too slow to run the stuff modern PC gamers want to run. Either way, it'll be a niche device that Valve shouldn't waste their time with (PC manufacturers will do it anyway). But nobody is making a dedicated portable streaming device as far as I know, and it seems like something that'd fit really well with a streaming service.