You can compare this fight to WoW Vs all other MMO's. even if its old (WoW), nobody leaves it and not even looking at the competitions, even if some of them are better. I know, its not the perfect comparison but you see my point.
Well, at this point it's arguable that there are any better MMOs than WoW. It is old, but it is also an order of magnitude more polished than anything anyone else has released. And most importantly, Blizzard is not resting on their laurels. WotLK brings a whole new level to the game. Recent attempts to come in by WAR and AoC show that MMOs are almost impossible to make right for release. We knew that for WoW, but at the time it was so novel that we were patient. These days no one is going to stick around for the 6 months it takes for devs to figure out how to fix their online experience - they'll just go back to the MMO they know works...
Steam on the other hand, needs to be completely stripped down and rebuilt if it is going to compete. Valve isn't stupid, I'm sure they see the writing on the wall, but in a way they are crippled by their success - it will be a painstaking process to shift all of their assets and customers to a new and efficient system. I'm sure they will do it eventually, but it will be interesting to see if they manage before they lose market dominance.
Meantime if I want to play a game other than TF2 I make sure I've closed Steam because it will drag my performance right down. My computer is 3 months old, and a beast, so I'm pretty sure that isn't the problem.
Impulse is being positioned to take advantage of Steam's age. It doesn't need to run while you play the game, which is huge. It allows user options and interfaces that Steam can't. It allows developer options and interfaces that Steam can't. Finally, you see Impulse working to get games and genres Steam has largely ignored. Indies, strategy, vintage titles...(If Stardock gets a bit of capital they should invest in GoG.com or buy it outright.) If Impulse plays its cards right it won't just displace Steam but also XBox Live.
Edit: FWIW I respect Valve tremendously, love their games and continue to use Steam, as does Frogboy, apparently