Are you suggesting that most hardcore console gamers use a keyboard and mouse? I don't think that's true...
Edit: Rereading your comment, I guess you might mean PC gamers who are sitting on their couches. I don't think that's the market this is after; it's trying to get console gamers onto Steam by providing them a cool new product that will work well with the games they have. This makes that a much smaller shift for those gamers than the keyboard and mouse. Will they still get owned by more traditional PC gamers (since they're now competing directly), as you suggest? I guess that's possible, but that's just saying "console gaming needs to stay separate", not "they should use a keyboard and mouse for console games", which just isn't on the table any more than PC gamers are going to switch to a handheld controller.
Any game with a PC version that is vetted as a competitive esport will find its pc version, with superior and portable control interfaces, to be the choice for competition.
See: CoD, Battlefield, Quake, etc. All prefer exact aiming with a mouse over fudging analog input sticks with aim assist.
By your wording, no, console gamers don't use keyboards / mice, because the games they play on consoles are not compatible with them, and are not designed to use them. Very few genres (fighting, brawlers) sometimes prefer controllers to keyboards, and when they do it is usually a personal choice, or the market has better alternatives to both (ie, fight sticks).
The major difference between a mouse and a controller stick is the type of input.
Mouse is a pointing input - for a movement of 1 unit, your view changes by 1 unit. If you stop moving the mouse, your view stops moving.
Controller stick is a velocity input - for a movement of 1 unit, your view starts moving at a speed of 1 unit. If you bring the stick back to center, your view stops moving.
It could be that the Steam controller trackpad is precise enough to be a pointing input sensor, which could enable precise aiming. But it's too early to tell before the first reviews are out.
There's no reason you can't use a mouse a velocity input and a stick as a position input; either one is returning a value in a two-dimensional space -- treating that value as "position" or "velocity" is a matter of what the receiving software does with the input, not the input itself.
Joystick calibration utilities, for instance, tend to take stick position as a position input, and ISTR a number of PC sims that preferred joystick input but could use a mouse like a non-auto-centering joystick.
> That is hardly relevant, using a stick as position input would give you, what, five units of movement on either axis?
From what I can find online, the PS3 controller is 10-bit per axis (1024 positions on either axis), the Xbox 360 is either 8-bit (256 positions) or 16-bit (64k positions.)
A 25-way joystick of the type you describe wouldn't be usable for most console games, whether as a position or velocity input.
It sounds like you're defining "hardcore gamer" as a competitive professional or semi-professional gamer. If so, I guess that's fine, but irrelevant to whether Valve will sell a lot of controllers. That's just not an important demographic.
Much more important is the platform market share for hardcore games, like CoD and Battlefield. It simply isn't true that people prefer the PC version [1], despite the inferior controls. CoD sells vastly more copies for console than for PC [2]. It's not even close.
If Valve wants to break into that market and compete with Xbox and PS, it needs a controller.
Many of the more serious FPS console gamers do you a mouse and keyboard: http://xim3.com/
Console will always be at disadvantage to the PC in this genre due to its low frame rate (usually 121+ fps is considered slandered for the genre in order to make use of a 120hz refresh rate). Consoles currently output about 20 - 30 fps, not really acceptable for competitive play in a FPS.
Edit: Rereading your comment, I guess you might mean PC gamers who are sitting on their couches. I don't think that's the market this is after; it's trying to get console gamers onto Steam by providing them a cool new product that will work well with the games they have. This makes that a much smaller shift for those gamers than the keyboard and mouse. Will they still get owned by more traditional PC gamers (since they're now competing directly), as you suggest? I guess that's possible, but that's just saying "console gaming needs to stay separate", not "they should use a keyboard and mouse for console games", which just isn't on the table any more than PC gamers are going to switch to a handheld controller.