Because Valve actually gets it.
Microsoft are chasing $1000+ "most powerful ever" hardware which nobody actually wants or can likely even afford. Their selling points are:
1. Maintaining access to the Xbox library (the rats already fled that sinking ship, see the sub-30 million sales this gen)
2. Steam integration (which of course is never going to be as good as what Valve does themselves)
Meanwhile, Valve are creating a highly accessible, likely pretty affordable, attractively designed and compact device, with best in class software and a massive ecosystem of games. Much like the Steam Deck, it's not bleeding edge, but it's going to be good enough for the vast majority of people. Remember that most PC gamers in the Steam hardware survey are using mid-range hardware. PC gaming is much more than just FPS and RTX cock measurement.
Also much like Steam Deck, this Machine reduces almost all of the friction of PC gaming for the casual user. The original Steam Machines failed a decade ago because the software wasn't there yet. Now it is. Valve already solved a massive amount of issues with the Deck. It's frankly absurd how well the software layer makes PC gaming on a handheld feasible. It's why people who are buying competing devices which use Windows come crawling back to the Deck.
Translating that back to a console-like home device is going to be incredible easy. Meanwhile Microsoft are going to be on their very first attempt at a device like this. It's going to be powered by software written by retards and AI, if Windows is anything to go by. Valve, on the other hand, have already learned from their failures with over a decade of experience under their belt.