"Traditional Linux userspace software" is an informal definition, but let's say something like X. Or your average window manager. Or, say, almost anything from GNOME.
"Traditional Linux users" is another informal definition, but if you use a distro, you're probably a traditional Linux user. Contrast this with an Android user. They run the Linux kernel but the software they interface with is an entirely different breed. The statement "Android is Linux" is true, definitely, but it's inside baseball to anyone but us nerds. The Linux-y aspects are more or less invisible (by design).
I'm not trying to slight either desktop Linux or Android or SteamOS or whatever, just to be clear. I think it's a huge win for Linux, at least in some sense.
I think it's misleading to read "Linux" and imagine "desktop GNU/Linux with all the trimmings." I can't imagine there won't be some way to get that on a SteamOS machine. My skepticism is directed at the idea that Valve will ship anything which, out of the box, resembles a traditional desktop Linux experience. I expect it will be more like an Android experience than Ubuntu, with rather limited access to OS internals, filesystem, package management, etc.
Does that make more sense?