Well, they've overcome the number one challenge, that's getting something launched. Valve does one thing great, and that's rolling out consistent updates and features, so I have faith they'll improve the platform if it gains traction.
In 2014 though, I think the biggest impact on their success will come down to marketing. Will people know what this device is? Will hardware manufacturers be able to get these units selling? Will people be raving about playing Steam games from their couch and telling all their friends to pick one up?
They're going to be a small player in the console world. I can't picture them stealing Xbox and Playstation users. Those Battlefield, Call of Duty, NBA, Madden, etc., fans make up a huge part of the console market, and I think they're incredibly loyal to their console, while being very unfamiliar with Steam. The Steam Machines might have a market with PC users looking to casually game in the living room, and they might have a market if they can offer cheaper hardware and lower game prices than consoles. Offering better visuals would be another huge plus. If someone visits their friend's house, and says, 'wow, why does XYZ game look so much better on your television?', that's going to drive some sales, since you always have a group looking for the best of the best.
It's a long road, and I think everyone is watching to see how this plays out. Valve is probably the only company that can make this happen at the moment, so it's exciting to see them taking a chance, and I applaud them for that.