Keep in mind you can always just plug in a 360 controller, so if you have one of each, you can switch between the Steam and 360 controller depending on the game and your preference.
I'm glad they went a different route, it opens up more options for gamers and developers.
That's the big thing for me here. They're obviously trying to bridge the gap between PC gaming and console gaming, but they aren't doing it at the expense of existing control schemes - I have no doubt that you can use a bluetooth keyboard + mouse, or a Steam controller, or an Xbox 360 controller to play your games. The Steam controller doesn't have to solve every problem, because it isn't an exclusive input mode for the platform. If it works on 95% of the games, that's a huge win and good enough for most people.
I'm glad they went a different route, it opens up more options for gamers and developers.