I feel like the Steam Deck is the best proof of Gabe Newell's quote that "piracy is a service issue."
They could have easily crammed the Steam Deck full of stuff to make it hard to use for piracy - locking down everything, making it usable only to play games you legitimately own, force you to go through who knows what hoops in order to play games on it. That's what Nintendo or Apple or most other companies do.
But they didn't, because they realized they didn't have to. It's 100% possible to put pirated games on the Steam Deck - in fact, it's as easy as it could reasonably be. You copy it over, you wire it up to Steam, if it's a non-Linux game you set it up with Proton or whatever else you want to use to run it, bam. You can now run it in Steam just as easily as a normal Steam game (usually.) If you want something similar to cloud saves you can even set up SyncThing for that.
But all of that is a lot of work, and after all that you still don't have automatic updates, and some games won't run this way for one reason or another even though they'll run if you own them (usually, I assume, because of Steam Deck specific tweaks or install stuff that are only used when you're running them on the Deck via the normal method.) Some of this you can work around but it's even more hoops.
Whereas if you own a game it's just push a button and play. They made legitimately owning a game more convenient than piracy, and they did it without relying on DRM or anything that restricts or annoys legitimate users at all - even if a game has a DRM-free GOG version, owning it on Steam will still make it easier to play on the Steam Deck.
Interesting take, for sure. I agree to some point. I also think Gabe just knows the audience, and he knows how much people would have rebelled against the very idea of this device if it came from Steam (not Valve), and excluded users. This would have been a completely failed product had the initial reviews been something like "Just a Switch knockoff".
Instead, this has garnered Steam as a platform with an entire group of adoring fans, some of whom used to be critics. I guarantee they added a ton of business to Steam as a platform just because a lot of users would buy, say, GTA5 on Steam again during a sale for $9 versus jumping through the tiny hoops to make a bootleg copy run.
They did a fantastic job in parallelism getting Proton to an easy to use product (for free, mind you), and reinventing the portable PC game. Many may not know that was an entire segment of handheld PC devices on the market for years before Deck hit, and Steam's team hit all the right spots to completely blow them away, and not only make them irrelevant, but also lure in new adoptees to Steam as a platform. Brilliant execution and moves.
man I remember using a 8" windows tablet with a 3d printed mount to a xbox controller to be able to play steam games like hyperlight drifter, it was so cool at the time but man did it suck holding it for long and the performance was so bad for anything but the simplest game. after that I turned to steam link with my phone and a razer kishi controller, I setup a headless steam docker on my server to keep my games accessible and that worked pretty well when 5G came out but nothing really beats games running on the hardware you hold in your hand, at least not for a good while