The main problem is that its not enough to be competitive with Steam at this point... you need to put out something so good that it give people enough of a reason to leave the comfort of Steam... you need Steam and then another layer of goodness on top of Steam.
This is the same issue that a lot of MMOs had when trying to become a WoW killer. You not only needed to have pretty much everything Blizzard put into the game, but more on top because otherwise why would anyone bother to leave the comforts of Azeroth to play something that is maybe marginally better, or a possibly worse experience?