This is all terribly ironic to me. Aren't these the same people who proudly proclaimed that 'PC gaming was dead!'? They were right, to a degree. The 'big name title bought off the store shelf' market is rapidly shrinking for the PC. However, PC gaming as a whole; either through Valve, other online distribution models, MMO's or what have you; is bigger than ever.
The direction that the 'conventional' gaming buisness models are keeling in the current times are reminiscent of the early 80's right before the great Atari crash. The bargain bin will again be the death of (the majority of) the 'big hit' gaming industry. Other media industries show us that companies are reluctant to change away from previous buisness models that were, at one time, hugely profitable.
The good news is that there will always be people there to fill the gap, and some of them will innovate new directions for our gaming media.
I'm skeptical about OnLive and the entire 'cloud gaming' concept, but I can't say yet that it's doomed to failure. It may work. Alternatively, if Valve released it's sales figures for steam, people might actually see how profitiable the online distribution of games through steam-like services can actually be. Valve may actually be wise by not releasing it's sales figures, for fear of 'bigger' companies trying to compete with steam on the market, rather than simply using steam like they are doing so now.
Steam is not perfect, and I can't say it will be the industry leader for online digital distribution in the coming age (like I hope it will be). However Valve has dedicated itself to improving it's products continually rather than resting on it's laurels. Besides, even if Valve fails, another company will take it's place.
There will always be greedy people who 'don't get it' there to feed us shovelware, and there will always be innovators who genuinely care about their audience.
I suspect that future consoles would benifit greatly from a 'Steam' styled buisness model, and that console manufacturers are only just starting to get on board with offerings such as XBL and PSN. They will either adapt, or they will be bypassed by somone else.