Hm, before Steam came along, it was actually not doing all that great against the PS3/360 generation, except for Blizzard, who practically dominated the PC with WoW, and not to mention the MMORPG fever going on then trying to ride on Blizzard's success. Anyway, without Steam (or digital distribution in general) I would think PC gaming wouldn't be dead, but it would be rather "static" with some ups and downs with releases, and it would certainly not thrive the way it is doing now. Honestly, I picture not much a difference of games being released pre-Steam... a lot of MMOs, FPSs (more Crysis and Call of Duty clones), RTSs, western RPGs, etc.
Regardless, I feel Steam really bought PC to a level playing field with consoles. I don't mean in any way to tech (that people would often compare the PC to consoles) - in fact, that separated PC from consoles, in a way that I feel PC games were almost alienating to console gamers, and vice versa. In a way, they were pretty different worlds.
But now, devs that make games for consoles now really care to bring 'em to PC too, and gamers care too, because a large part of console gamers (including myself) have switched over to PC, which has become much-much friendlier to console gamers. Steam has made their games fairly universally compatible across a variety of computer specs, not to mention their revival and constant deal of older games have offered a way to make it so that old games are no longer "obsolete" to new games.
Likewise, console games have become "more" like PC games (a big part of that is everything to do with online gaming and distribution), and lines between the two are basically blurred today.