I don't think "if it's not on Steam, it might as well not exist" is indicative of anything other than the multitude of amazing games out there. We all have more games to play than time to play them, even people who are limited one console or with relatively limited taste. Pretty much every genre is filled to the brim with awesome stuff. That's the same reason why you see people here "waiting for sales" all the time--if we've already got enormous backlogs, the urgency of adding new games to it Right. This. Second is diminished. There'll always be something to play. And so rarely are there games that profoundly upend one's expectations that for the most part, the choice will be playing one of the excellent, A+ games we already have, or spending money on another potentially excellent, A+ game.
Add to that a fairly bright line distinction in terms of management within the Steam client (and to Valve's credit, they've finally added custom images in grid view and the screenshot function allows for users to set custom backgrounds, so non-Steam games look much better than they once did), Steamworks features like achievements, and community events like how the sales encourage people to buy and play a lot of independent games, and it's not surprising that people who get picky get picky in this exact way.
The suggestion I proposed to help solve this a little while ago is to pick a handful of independent developers who have already been successful on Steam, and allow them to "sponsor" in other independent developers. Not for a cut of the income or anything, I mean as an advisory role to Valve. It might even be worthwhile to get some Tastemakers in the loop--RPS springs to mind immediately. It'd be pretty easy to make a number of objective restrictions to help the process from being abused (for example, the game must be released, complete, and available right now to prevent games that seem promising in a preview but don't turn out all that great).
Certainly Valve must have an appeals process for rejected submissions. Just get in touch with the submission guy's boss... oh, wait...
The appeals process is to submit again with further press clippings and business analysis to help Valve understand what you bring to the table. Feep (GAF member) had to submit 3 or 4 times to Steam and only got on in the end after what I understand was basically a friend-of-a-friend connection landing him the ability to pitch to Valve in person. He's been extraordinarily successful and obviously Valve believes in his product because he's been featured as a daily deal and was a major part of the holiday sale last year.
