I'm not sure how they could have failed that if that was never their goal in the first place. The entire point of Proton is that the Win32 API is infinitely more stable and worthwhile to target than anything Linux distros offer, and that the financial incentives aren't there for developers to 5x their platform distribution effort to reach 1% more users. An approach that relies on developers doing that would never work, and fortunately for Valve that isn't their approach.

You're thinking of now. Proton didn't exist yet the first time they tried Steam OS.

To be fair to Valve though, back then, there was a lot of movement in direct ports for Linux games. Humble Bundle (before they were bought) was spending real money on it and companies like Feral sprang up to help with titles like Mordor. It looked like there was going to be some real change.

But for various reasons the momentum waned. One of those reasons might be the existence of Proton itself. Some people were very against it because they thought it might lead to less native ports.