Sure, but Valve is terrified of the Microsoft store for a subtly, but importantly, different reason than why Microsoft should be terrified of Steam OS.
Microsoft should be terrified that Steam OS will destroy their monopoly by making it so users no longer have to use their product.
Valve is terrified that Microsoft will destroy their monopoly by making it so users no longer can use their product.
Those are two orthogonal things, but they do both point towards Valve being the better choice between the two. But if there were a Valve vs. Microsoft duality where the choice that's better for anyone that's not the two of them is to side with Microsoft, I'd be disappointed with Valve, but I'd choose the Microsoft route.
I don't think that's likely, as Valve have repeatedly made choices that are better for the consumer even when they're not better for Valve, but I'm not ruling out the possibility.
As long as SteamOS doesn't fail, yes. If SteamOS draws enough gamers for there to be a healthy amount on Windows and SteamOS there will be competition between the two OS-s, which will benefit everyone. If SteamOS does draw away the supermajority of gamers then we still benefit because the open source nature of Linux makes it much harder for Valve to have total control like Microsoft has.
Microshit already lost, most windows users just don't know it yet. Sure microshit will get another 25 years as generations shift.... Similar to opinions on israel but the trend is set