The problem is that SteamDeck1 runs PS4 games better and more stable than PS4, including such hits (in my personal opinion) as The Witcher 3 (no update, it's terrible because CDPR just made a compilation of mods), AC Origins, Valkyrie Chronicles 4, and many more. In most cases, if you roughly set the console preset, you can achieve stable 40fps (although not always)!
Thanks to the 40Hz screen, everything works perfectly and comfortably at 40fps (personally, I choose this format even if the game allows 60fps, because the difference is not felt after a couple of hours, and it increases battery life).
Also, the SD1 can even run some PS5 games in decent quality, such as Ratchet & Clank Rift Apart and Returnal at 30fps.
And now imagine that SteamDeck 2 will be much more productive, and other Sony games will be released on it... There's no way a "portable PS4" can compete with it, especially considering that SD2 will offer the opportunity to get Sony games "for free".
PS: Also in my opinion, the SD2 hardware will allow the NS1 and PS3 emulator to work well, and this will also be its significant advantage, Valve will do nothing to prevent this, it's beneficial for them, and they will not be legally involved.