The goal of this controller is to be good with most Steam games, which have been designed for computers. Traditionally, console controllers predate the games, the Steam box is trying to be a "console" that goes the other way.
Basically, imagine trying to create a "controller" that works well with Civilization, and you're on the right track. (That isn't the only example, but it's a nice, concrete one to try to think about.)
This is for games that would otherwise require a mouse and keyboard.