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What OS are you using? If I'm not completely mistaken here, people started using ASIO for music playback on Windows XP because the native kernel audio mixer resampled everything to 48 KHz in a very non-bit-perfect way. Ever since Vista, Microsoft hasn't been doing any non-neutral processing in the kernel mixer. As long as your soundcard/onboard audio isn't doing any DSP and the DAC is getting a clean, unprocessed signal, even standard windows audio drivers should be just as bit-perfect as using ASIO.
That said I still greatly prefer ASIO for production and editing because of the reduced I/O latency and overall much greater quality when dealing with resampling and processing.
If you're really serious about music you're probably using an external DAC anyway. ASIO for music playback served its purpose at one time but is kind of unnecessary unless you're using XP or have doubts about the quality of your sound card.
100% agree with your comments about supporting the latest ID3 tag standard.
I'm no developer for the Steam client but Steam already has an audio input device selection in the options menu for microphones. Maybe an option for preferred output device would be nice to have in the future so you can select an ASIO driver. I don't know how much of a pain coding in hooks for using ASIO as the output device driver would be, but DirectSound is a Windows technology and the entire Steam ecosystem -- including SteamOS, Steam Music, and Big Picture -- is supposed to be cross-platform anyway.
Edit: grammar
The primary issue I would foresee is that if Steam takes exclusive control of an audio output to play music, the video game may not be able to play back any audio if the audio isn't routed through the same application that has control over that output (steam), unless a different output is used. This is no problem for someone with multiple outputs or if the audio for video games does somehow get routed through steam and then combined. I imagine a lot of regular users would be quite confused by this--but then again, they probably wouldn't use the feature in the first place.
Although I don't honestly expect much, it's definitely worth at least a discussion.