Also answering your points in order:

1. You're absolutely right that many gamers would probably consider switching if Steam Machines take off. The problem is that somebody has to buy one in the first place for such a scenario to happen, and I can't see anybody in the target audience actually being interested at the moment. And my point about features that comes with a subscription isn't that those features are somehow only available with a subscription on PC, but that console players are perfectly okay with paying for these features that are free on PC. To millions of Xbox Live and PlayStation Plus subscribers, the subscription isn't a bad thing, but a way to (hopefully) ensure that they receive high-quality service and frequent improvements. Remember, console gaming is all about convenience - paying a little money every year for a reliable and enjoyable service is a benefit to many of these people, so an argument about not needed a sub on PC is missing the point.

2. Certainly some games do get dramatic sales more quickly than others. I over-exaggerated for emphasis with my point; thanks for correcting me here. What I should have said was that many of the major games that release (of course that's subjective to taste to some degree too) don't quickly go on sale, or at least aren't on sale until their successors are released. Games like Assassin's Creed, Call of Duty, Battlefield, and FIFA aren't on sale until at least eight or ten months after their release, which is such a long time in their lifecycle that many consumers (especially console consumers) would elect not to play them at all and instead to wait for the sequel.

More over, I should mention that the upfront cost of PC gaming is much more intimidating to a potential customer than benefit of cheaper games (which really don't become that much cheaper to a console gamer living comfortably in a world of used games) than the benefit of cheaper games offsets. Even if, over the course of a generation, a PC will pay for itself in sales, that does nearly nothing to assuage a consumer of a the initial cost to get into PC gaming to begin with.

1. I don't really understand your point here. Are you saying that, given enough time, inexpensive PC hardware will surpass console hardware? If so... That seems so obvious that I'm not even really sure why you're arguing it.

My point is that, dollar for dollar, in November of this year (when a consumer will be choosing between the first wave of Steam Machines or a next-gen console), console hardware is superior for the price. It doesn't really matter to anybody in the market today whether a Steam Machine from 2018 will be better than a PS4, and telling someone who's looking to buy an inexpensive game platform that will last them five years that a new, better Steam Machine will be out next year is totally irrelevant. Barring the small percentage of super enthusiast PC consumers, gamers don't replace their hardware every year, or even every two or three years.

1. I'm sorry that I misunderstood your point then. It's absolutely true that console hardware is static for long periods of time, and that if you disagree with something that your console producers makes, you have no option other than to outright ditch the platform. However, I think this is largely a nonissue to the vast majority of consumers - not only because of self-evidence from the popularity of console gaming, but because Steam Machines have the exact same problem, even if there appears to be an illusion of choice.

Let's be clear on one key point here - a Steam Machine that costs more than (for an arbitrary number) $1000 does not compete with consoles. The price difference is too large. In the same way that a potential homebuyer who's budget allows for a two-story, suburban, single-family home isn't looking at twelve bed, ten bath mansions on the lake, someone considering an Xbox One is not going to put any thought into tripling their budget for the luxury of buying the objectively better device.

Because of this point, the only really viable Steam Machine options to 99% of gamers are going to be the bottom of the line (or very close to it) ones. This means that only a couple vendors are going to offer Steam Machines that anyone will buy, and what follows is that the console player who switches to Steam Machines is trading his Microsoft or Sony overlords for Alienware or ASUS ones. And even if the underlying software that ships with a Steam Machine is more customizable, that means absolutely nothing (and in fact is intimidating) to a consumer who wants a worry-free, streamlined experience.

My ultimate point I suppose is that the difference between PC and console gaming is not power vs. ease of use like many people seem to believe, nor is it about desktop vs. couch gaming like it seems that Steam Machines as an idea believes, but about intimidation vs. comfort.

Computers are scary things to many people - they're easy to break, expensive, have 8161026101525192726 things that can go wrong, and are still (even with improvements like SteamOS) too damn complicated for what most people use them for. A game console offers a closed, controlled, maintained environment where a player can just relax and play some games, while trusting the designer to make the right technical choices for her. Sometimes this mentality is taken too far and people complain, yes, but it's a mentality that welcomes players to just sit back and enjoy the ride. And that's what the vast majority of players want out of their games. PC gaming will never draw in the average console player until it acknowledges and accommodates for this, and Steam Machines do absolutely nothing in that regard. Ultimately, they're just expensive, pre-built gaming PCs that sit under your TV - they offer none of the benefits of a console and take away many of the benefits of a custom built desktop.