The streaming of other OS games from your other OS systems seems like a pretty compelling and surprising feature. I wonder if it will work with all games.
In reality, most consoles are hooked up by WiFi nowadays which will make things even worse. Android manufacturers have struggled with smooth display mirroring over WiFi for a long time and the only time I've seen it work good enough for gaming is WiFi Direct connections via Miracast or wired connections via MHL.
Of course it does, but we're not talking 10Mb/s networks here. People stream 1080p content all the time, gigE can handle that no problem. The only latency concern would be the encoding step, not transferring the data.
Audio & Video, on the other hand, is more interesting. Let's assume everything is running at 60fps. Your encoder is therefore not adding any more than 16ms (if it was more, it wouldn't be keeping up and therefore not doing 60fps - it could definitely be less, though). Blu-ray is 48mbit/s, but for 24fps (youtube 's 1080p is ~8mbit for comparison). Let's take that same 48mbit/s, but adjust for 60fps instead. 1 frame would therefore be 0.8 mbit, or 100KB. If your network can do 48mbit/s, your video latency would therefore be 16ms. If your network is faster, though, the latency drops proportionally. Even a cell phone can do 100mbit/s on wifi, which would be 8ms of latency. A gigabit network would transfer that 0.8mbit needed in about a millisecond.
So your total latency of input, encoding, and transmission of the frame would be 32ms at most, and if you have a fast network & computer it could actually be down in the 5ms or less range.
Main reason seems to be that while SteamOS can only handle games that have Linux support the streaming allows you to have "HTPC" SteamOS connected to TV and play anything that Windows machine would be able to play.
Of course there's the input lag etc which might be an issue in some FPS games etc (which they mention that they're trying to "reduce in operating system level")