The company that gave up making games because there was more money to be had from inserting itself as a middleman into a previously open platform does not deserve any adoration.
The true answer here is that people went where the games went. And those AAA distributors preferred a middleman doing everything for them in exchange for getting a cut. From there, AA and indies went to the middleman because they more or less had to to compete. Whether or not you consider market capture the whims of the consumer or a natural consequence of capitalism is a more philosophical question to ask.
On a more fundamental level, it seems like people will pick convenience over security and freedom every time the choice pops up. In the land of media, this comes down to choosing to put all your eggs in one basket in exchange for having less control over the products you bought. We've seen this across Netflix, Steam, and Spotify as the largest modern examples.
It is market capture, and you don’t get to just hand wave it away with how it’s only philosophical. It has real world ramifications, it is a real consequence that can put consumers under duress (distorting the market) and/or leave them with no viable alternatives (which a free market is allegedly supposed to prevent)