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Yes and yes, depeding on prices and game library size.
Right now the Xbox 360 is aging and I never liked the pricetag of PS3 games.
I think steam has a business model much more focused on service delivery. Immagine if you could get any game on steam running on a "steam box"....
Based on the research I have done on the steam console it will effectively be an i7 mini itx box with a to end Nvidia mobile graphics card built into it.
So you get a pre built little PC with steam pre loaded onto it. I can definitely see a market for it and it should create a nice benchmark for gaming companies to build to.
So overkill CPU with a poor GPU, with poor cooling? Ya, I'll pass... And it wont be a nice benchmark to build to at all imo, it will be low to start with, and then it'll just get progressively worse. Just like... current consoles!
If its just a mini PC... well you can build that yourself.