I'm not a big PC gamer, I mostly play on Xbox consoles, so I may be missing some specific uses for Steam that are missing on the Xbox app.
Personally, I found the Steam interface cluttered and too busy in comparison to the Xbox app which has everything upfront and has a cleaner modern design with very few menus.
I always found the Steam app to be a resource hog but a necessary evil because the few PC games I wanted were there.
The Xbox app did run slow and crashed a few times on me in the earlier years, but lately, it's been flawless and game streaming is quite fun.
This is just my experience.
I don't dispute the Xbox app has issues for the more dedicated PC gamer in comparison to Steam which just has many years as the de facto standard for the pros.
I hope there will be some changes down the line that will be beneficial to the platform and get noticed by the users and devs.
Would be a shame if they fixed everything and it works perfectly, but social media including news outlets still base their opinion on the old version and avoid the app altogether.