I think it works for them in the sense that they could do precisely nothing other than maintain Steam and continue to make a fortune, which means in development terms they can bumble around doing whatever they fancy. As a means of experimenting and tinkering and playing around with new ideas, it's fantastic as that level of freedom allows for real creativity. As a means of producing releasable products, it's hopeless. If I were them, I'd have two partially rotating development areas - the current free-for-all they have now and a more formalised team that aims to actually produce new stuff. Developers could spend, say, two weeks on one area and then two weeks on the other area. That way they'd retain their creative freedom which I do think can result in some excellent things, but they'd also end up using those things in actual products which the public get to see and use and enjoy.
"This boy is depriving a village of an idiot."