In an interview on what makes Valve tick, Gabe Newell had this to say about Steam and the company's direction:
When we started out we were a single-player video game company that could have been really successful just doing Half-Life sequel after Half-Life sequel, but we collectively said let's try to make multi-player games even though there's never been a commercial successful multi-player game.
Then we tried to do Steam. There were a bunch of people internally who thought Steam was a really bad idea, but what they didn't think was that they would tell the people who were working on Steam what to do with their time. They were like "that's what you want to do with your time, that's fine, but we're going to spend our time working on Half-Life 2. We think you're kind of wasting your time, but it's your time to waste."
In retrospect, it was a great idea, right?