I have to agree with the other posters here that Steam isn't killing the PC market and the bricks and mortar stores don't like it because they're cut out of the loop. They're effectively obsolete and out of business, so there's no way they'll ever go for this.
What I don't understand, is why you get games released on a physical DVD that require Steam activation, such Fallout: New Vegas. Other than someone that wants to have the box to put on the shelf (like me!) there's no purpose to it other than to keep the B&M stores in business.
I know people use the argument that it saves on download times, but I don't think that this is a compelling argument any more. You still have to significantly update the game after installing it from DVD and most people today have reasonably quick broadband connections. Even a lowly 1 or 2Mb service would do.
The only reason I can find at all, is that the direct from Steam price has a habit of being higher than getting the DVD copy, which is nuts and somewhat profiteering on Steam's part. In the case of Fallout: New Vegas, it's currently £30 from Steam and £24 from Amazon.

I've looked up a few other games and in each case, they're cheaper to get the DVD.
Ok, now I think about it as I write this post, I believe I know why. If Steam simply priced those games at reasonable prices and cheaper than the DVD copy, nobody would by the DVD copy and the stores would go out of business.
By pricing it higher, Steam get to charge a premium for the convenience of not having to run out or order the DVD online and have to wait. The stores then charge for the DVD copy at a more reasonable price, which people will buy if they want to save the money and are prepared to wait or drive down to the store. And the other reason why Steam is happy, is because they get a cut of this revenue, too.
Sound reasonable?