So, I work on the Store, but Phil is completely right - if we never released first-party games exclusively on the Store, then we wouldn't have learned nearly as much as we have. Steam releases would have meant much lower volume on the Store. Lower volume on the Store would've meant much less traction with customers, and much less ability for us to debug issues and improve things.
Our success with Forza Apex and Killer Instinct has in particular proven this - they were successful for customers, and successful for us in terms of volume and our ability to find and fix issues more quickly.
Even though we already had a massive amount of improvements in the works for the Anniversary Update coming this Summary, those improvements would've been much less effective without what we learned about releasing the games we did release on the Store so far.
In the meantime, absolutely no one is oblivious to the issues we have with the current iteration in the Store. Especially Phil - he's just as genuine and knowledgeable in person as he is in interviews.