GOG can't compete because their current strategy is blue ocean compared to Valve - they sell indie and older classic games at reasonable rates with the good hook of DRM-free downloads. Other than that, they don't really have any way to really challenge Steam, and in my personal opinion that's fine. Steam does have relatively lenient DRM policies (the real problem is companies that add additional stuff like Denuvo onto their game), but obviously can't emulate GOG's policies without alienating a ton of devs, and GOG can't copy Steam's policies or the same would happen with their existing users.

(Also to clarify, Steam does not require any DRM for any game listed on the Steam Store. Check any Toby Fox game.)