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Because this works for the enormous back catalog of games that already exist, many of which I bet companies no longer have the code or a working build system for, and for new games it doesn't require the developers to do anything because many (most?) of them wouldn't bother

They may provide an option for developers to distribute a native ARM build (which some are already building for Quest titles that can be brought over to Steam Frame) but one of Steam's main advantages is their massive x86 games catalog so they certainly don't want to require that