First of all, yeah, price parity sucks...but also the only thing it changes is that simply being cheaper isn't an option. From my PoV all it does is it forces competition to compete on features. Which they all fail to do.
Also, it is not just about making a better product. It is switching costs. Because our libraries and social circles are locked into a proprietary ecosystem, we aren't choosing Steam every day. We are just stuck there.
Friend, steam literally alows you to load games outside of steam. You absolutely can still rely on steam friends when playing even pirated games. Steam literally allows you to do it. And having more than one store installed, while not comfy, isn't a sin - we are choosing steam due to it's services - controller support, linux support, inbuilt forums, friend network, robust review system, robust return policy, great user support, and probably even more that I don't know about due to being more niche.
The solution is not for a competitor to build a "more perfect Steam," that is impossible because Valve has a 20 year head start on our data. The solution is mandated interoperability.
Again, bull. Let's look at competition, sans "We only sell our own games" stores.
- Epic Store - Literally antithesis to all you wrote. They push free games for you to build your library, buy exclusives to remove the forced price, advertise themselves as much as they can to push through steam's domination...but they don't support anything aimed at consumers. They don't give a diddly doo about you. Thus, they fail...better yet, managed to piss people off.
- GOG store - They tried to innovate and find their niche and...they did it. Oh my, it's like if you actually offer something it gets apprwciation from clients. It's small compared to steam and doesn't offer that much client-side, but with what they offer, they found themselves in stable position and with good public opinion.
- Itch.io - Similiarily to GOG, they used a niche and created sctually somewhat rich ecosystem there. And again, similiarily to GOG, they achieved stability. Supporting both comments and forums and alloeing creators to be close to their community, they became great place to start up and test waters. But they lack friend networks (AFAIK), game invite integration and all that. Although it seems they are okay with their niche...also I believe that their shop actually did chomp that niche away from steam, so they prove that competition is possible.
And just to be clean - I am not against your interchangable library idea, although I am not really for it either. I just really disliked how you described steam as some monstrous entity holding people by ransom.