It strikes me that with all the progress on getting Linux working on the M1, getting Steam going there should also be doable and I think it already partially works.
But of course Valve could double down on getting proton working on mac os as well. I don't think that there are many fundamental blockers for that beyond the dealing with metal instead of vulkan and intel vs arm. And they could fall back to using e.g. qemu.
It's probably a bit of work but it's also a rich market of people used to spending money on expensive hardware that might be tempted to buy lots of Steam games if it becomes easy enough. And of course they have an insane catalog of older games that aren't that demanding that probably run fine even in an emulator. I bet this would piss Apple off a lot though but I'm not sure they'd be able to do much about it.