New competition need a way to create incentives for people to use their services over valve. Here is an example, if google released a console that had nothing more than third party games and had no killer exclusive app, would you buy it? Most people are going to say no, this is the exact same scenario except that for some strange reason PC gamers seem to think more competition is bad?
Depends. How much is Google selling their box for, what features & specs the console has, and what 3rd party games are going to be available? If they can compete or beat existing consoles in price and features and have a sufficient library available I don't see why it wouldn't have a shot. When you are competing on price and features rather than exclusivity the consumer will benefit more.