It has moved on the desktop front - a few inches anyway.
I use desktop linux as my primary OS every day. It's still not ready for prime time, but it's finally close enough that I can deal with it.
Some fun things that happen to me on a regular basis - you'll note that these issues have nothing to do with "gamez":
* my sound stops working and/or diverts to anther output. I still can't get it to detect when I put in a mic or headphones with any reliability. Yes, the hardware is compatible.
* behavior on attempted suspend or wake is always a crapshoot.
* it shuffles my desktop layout every time I unplug/replug in my two external monitors
* memory gradually gets consumed. Even doing a restart of X doesn't fix it. (No, I'm not talking about cache.) Under mac I was rebooting once a month. Under windows it was once a week. On *desktop* linux I do it every 2-3 days just to keep things working. (Server-side linux goes for months.)
* sometimes networking stops working. I have to disconnect/reconnect wifi.
* invariably, on a daily basis, I find I have to tweak *something* to make it work or keep it working.
* Here's a fun one: using vim with clientserver enabled resets my Konsole appearance profile (fonts, colors, transparency) every time I open the editor or remote-open a file with an existing session.
Obviously none of these are deal breakers - the positives outweigh the negatives. The control, user interface, tools and projects available, and many other things make the tradeoff worth it to me. But I wouldn't call it a smooth experience, or even an experience on-par with other desktop OSes if we're talking about ability to "just work" without issues.
"But for many GNU/Linux users giving up their freedoms may not be worth another brainless AAA title."
Neither you, I nor any other users who are intensely interested in freedoms are the target audience for SteamOS. SteamOS won't affect what you and those users and I can use Linux for.
And - because I suspect somebody will pipe up with some veiled-snark solutions or suggestions for my issues - you're missing the point. When using a stable desktop OS, I should not have to spend time on these things. I didn't have to on either Mac or Windows.