The part about controllers really shows that the steam box is going to basically just be another console. Why would someone buy the steam box to play only games that can use a controller and can only play single player games? it is like having all the downsides to having a console, without the one upside of being able to play with others.
Steam box is targetted to go in front a TV like a console. Hence the small and unique-ish look. Anyone who will park a keyboard and mouse in front of the TV on a regular basis would mind parking a mid-size tower either and doesn't need a steambox.