They're not worried one bit about that. They know for a fact that Microsoft doesn't get the PC gamer and that was made clear with their attempt at GFWL. I've seen absolutely nothing suggesting they're getting it right this time, either.
If he is afraid that Microsoft's store will overcome Steam, it's not because he believes it'll be better. It'll be because of the limitations to third party applications and the fact that you'll have their app store on your PC by default.
Microsoft has tried many times to take over the PC market and now, after failing so many times, they're trying to play dirty by making it hard for anyone else to compete with them. Instead of trying to do things right the honest way by making it a great service, they're going to attempt to break the legs of their opponents.
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