Steam was initially launched in a time when the retail business was booming and the speed of the internet connection of the average user was pretty low, with a few exceptions from Asia.
The first game to require Steam was Half-Life 2, possibly the crowning achievement of Valve in terms of gaming. The concept was new back then and people were not happy that they had to install another software beside their game.
Steam spent a couple of years in a sort of limbo, trying to make its way into a crowded market controlled by big publishers with a retail model of business.
Once people have started gaining access to high Internet speeds, the digital distribution platform we call Steam has started growing exponentially.
Valve soon started to offer amazing discounts for games and we now have reached a stage in history when digital distribution is as important, if not more, than the retail business. Moreover, some games are now launching only though Steam, skipping the publisher step entirely.
Imagine the happiness of the Linux users when Valve announced Steam for Linux. This not only means that a lot of excellent games are going to be ported to Linux, but that the developers will start looking at Linux as a valid gaming platform.