A Microsoft handheld would run less games that a Steam Deck with Windows because console exclusives like Horizon Zero Dawn are available on Steam but will never be on Xbox. An Xbox device also wouldn't support emulators or someone's existing Steam library.
I don't know to what extent it would be worth it for Microsoft to dabble in that area. PlayStation Vita didn't work out so well for Sony.
The point I'm making is that normal folks will not dock it or goof around with touchscreen compromises in order to run Windows, which they will also have to install themselves! This is the opposite of a smooth, integrated, pick-up-and-play experience.
Since MS makes hardware now, what's to keep them from making a handheld that runs the Xbox version of Windows?
Not coincidentally, this is the same reason that MacOS doesn't have touchscreens. Everything about that OS also requires a mouse (or touchpad) and a keyboard. Just adding a touchscreen to a Mac won't do it.
I'm personally also really happy that this gives incentive for AMD to improve their hardware support on Linux.
Using Windows on Steam Deck (not using Steam on Steam Deck, using the Windows OS) is going to be difficult because the device lacks a mouse and keyboard on which Windows is dependent. Fixing this for Xbox required making an entirely new UI (for the OS, updates, sign-ins, everything) which Steam has not done for the Deck.
As someone who has been using Steam since the early days, this feels incredibly anachronistic. Steam pioneered digital distribution but Windows as a gaming OS was already well established at that point.
What I mean was that Steam simplified the selling, installation, updating, forums, mods, everything else -- the store that Microsoft really wanted to have with Games for Windows that never took off.
Instead of a venue where multiple options are presented for review by the reader (along with editorial comment, of course), we now have platforms which are nothing but editorial. Not only individual people but individual comments are called out for censorship. This is not how news reporting was done in the past.
It's sad because today, there isn't a single website where a curious individual can review all of the views on a subject (or all of the comments of opposing politicians, for examples) without the platform weighting or simply removing views it doesn't like. This is a loss of objective information and is detrimental to education and intellectual and social advancement.
Instead of journalism, each "platform" now picks and chooses stories and voices that amplify its overlords' goals and nothing more. There is no truth to be delivered, only "my" truth as seen by my platform owners.
It's a sad day.