You don't get cheaper prices at retail stores, though.
But you do and that applies to both PC and console. I bought Sim City at launch cheaper at retail than I could have bought it digitally. It's especially more true with console games. Console is typically always cheaper at retail than digital.
Ignoring the fact that nobody sells PC games at retail anymore,
If by nobody you mean ignoring Toys R Us, Fry's, Target, Best Buy, WalMart and K-Mart, GameStop, Amazon, NewEgg, etc, then sure nobody sells PC games at retail anymore.
when compared with retail prices (even sales) for non-used console games at retail Steam is consistently much cheaper, especially for older titles.
Steam is only cheaper when you factor in the huge mega sales. That is what draws people to Steam and has the last few years. It's done wonders for the platform, but then you get a ton of people who simply wait for the Steam sale. It's happening right now as people wait for the Summer one to take place. DD is definitely great for older titles though since they don't take up shelf space.
The key part is that people choose to buy it from steam more often than not because it's the cheapest way to acquire it, which isn't true for any digital store on consoles. So yes, price is the main point for most people, and the main point for MS as well.
But the thing here with price though is people cite GMG on Day 1 releases of examples of how Steam is cheaper, but they completely ignore you can get similar sales from various retailers for physical console games too. Had the Xbox One went through with its terrible policies, you could have seen similar sales from competition among retailers for the physical unlockable digital games. It would have been similar. I guarantee you when the Xbox One launches, there will be sales on all the games on Day 1.
Steamworks is controversial, but people don't choose to use Steam and Steam isn't dominant in that market because it's closed, since it offers a bunch of advantages despite the obvious disadvantages. The implication that needs to be addressed is that any system with the same disadvantages will have the same advantages, or that these disadvantages and these advantages are inexorably connected, when neither of which is true.
I didn't say they chose it because it is closed. I'm saying people keep throwing around how open the PC but fail to acknowledge the fact that Steam is in fact a closed platform. With that closed platform comes restrictions. For a good chunk of PC gaming, you're stuck with Steam despite how open some people are trying to make it sound.
If MS wanted to set up a DD store that's just as good as Steam is, they could do it without disc authentication, but that's not what MS is trying to do.
Disc authentication is just like a PC physical copy being authenticated. It's the same thing. In fact it did one thing better. The ability to deregister your copy and resell it. Where MS really screwed up was the check in policy and the messaging on how this all was supposed to work among other things. I'm not saying Steam isn't better, I'm just saying Steam isn't the open freedom that people imply that it is.
My point is, without the consoles, those games don't get created or the budget for the game goes significantly down - meaning the cheap PC $20 sales people see aren't a function of Steam, but more a function of the fact that their primary platform is console...
People are giving credit to Steam for low prices - when they should be crediting the hordes of console buyers that end up making those games break-even, and piracy on the PC in general for multiplats that forces publishers to be happy with $5
Remove consoles, remove piracy from the PC, etc. I guarantee you publishers aren't going to have a soft heart and let you play their games for $5
And this is a contributing factor on the low prices.