I have been on Linux for years now, but known hardware is the reason why things will tend to break less often with driver updates, and updates in general. With a PC that gets hardware upgrades semi regularly, that is much more of an issue in my experience.

They still seem to operate under the assumption that they're a small player.

In terms of hardware, they kinda still are. They're not shipping out nearly as many units as the Switch, XBox, or Sony. Sure, some of that is simply their lower volumes, but they also don't have monopolies via exclusives due to PC being an open ecosystem. After the Steam Deck launched, plenty of other manufacturers either updated or developed new handheld PCs to compete.

Also, scaling up manufacturing is expensive and risky. Ram manufacturers rapidly scaled up production about 10 years ago to address a shortage, and they all got burned with overstock (and accompanying low prices) when the shortage ended. That's part of why they don't want to scale up again to deal with the current ram shortage, because they know they'll get burned again in a year or 2 if they do.

Plus, Valve has already stated they don't want to own the entire PC hardware market, they want to expand the ecosystem and have multiple manufacturers competing for customers. If the Steam Machine is enough to pressure XBox, Sony, Nintendo, etc. to turn future generations of consoles into mere prebuilt PC's they'd be happy with that