I mean you said it yourself, Windows based handhelds have been around for years long before the current push: they aren't going away. This is the start of Valve really pushing SteamOS as an alternative gaming operating system, but SteamOS is still not windows. As stated it only has access to a singular storefront/launcher and doesn't support every game (even those on Steam). While it is expected that Valve will inevitably grow the list of supported games, they will never make that every game just due to compatibility issues with legacy software and licensing and what not. SteamOS currently still has issues with DRM and anticheat games.
Not everything has to be the death of something else. That's one thing I really hate seeing on the internet. The overexaggerated XYZ-killer. Even now I'm seeing a LOT of news articles titled that the Steam Deck is dead because of this. It's like people want to live in a monopoly. I see this as a good wave of healthy competition. Much needed healthy competition. It's not like an alternative to windows for gaming is new. Heck, current windows handheld users have been able to download Bazzite (which offers a SteamOS like experience) for the longest. As a gaming OS, Windows has been sitting on its laurels for the past well ever. They were the default only option for the most part and knew that. Microsoft hasn't really done anything to actually stay competitive in the space (even when they literally created a gaming platform in Xbox). Now Apple is pushing more for PC gaming support on MacOS and through SteamOS Valve is heralding gaming on Linux. The majority of gamers are still going to be on windows for a long time and every PC game will likely continue to support windows in a way they just don't or can't on other operating systems. Not to mention that the vast majority of benefits that people equate to PC gaming will continue to only be available on Windows and when it comes to non-gaming uses Windows will continue to offer users a lot as well. Part of the allure of a Windows handheld is that it's just a Windows PC and that makes it usable for work and play.
I think it's very telling that Microsoft sent an Xbox exec to this event specifically to be part of the PC gaming handheld discussions. There's probably a lot of internal conversations going on for how to keep Windows as the number 1 gaming PC OS for decades to come, and how to combat losing market share in this space. That's a very good thing. I also think that with how much cheaper the SteamOS license cost is and how that leads to much lower prices, we'll continue to see these SteamOS handhelds hit markets with a console like experience and a console like price, and I hope that means we'll similarly see disruption in the console market with gamers questioning why the value of their consoles have stagnated so much (Nintendo and Sony don't even offer free cloud saves). That's also a very good thing. It looks like we're set to see much needed competition in places that there hasn't been in the gaming industry. That'll hopefully make all these companies wake up and compete to give us more value and just in general a better experience. The MOST improvements I've ever seen to the Xbox App on PC came post Steam Deck as the Xbox App on PC tried to really benefit from the Windows handhelds coming out and offer a more intuitive experience. That's what I expect to see more of.