This seems like a publishers "rift". Wouldn't they do this with any streaming service? I honestly haven't been paying much attention so I don't know if this is true or not for other gaming streaming services.
This is like EA pulling their games from Steam so they can have them on Origin, except we don't even know if this product will work and with Activision/Blizzard here they probably haven't even started making their own so overall it's way more ludicrous. I don't think it's necessarily going to be the death of the service though, but you're probably going to see some big publishers be complete dumb asses about it.
From what I can tell here this NVidia service is like Stadia but much more modest without the hype or any bell's or whistles. From what I can tell there's no extra controller or store front or game optimization, you just take your existing Steam account and if your PC is maybe under powered for a game you can pay a low monthly subscription fee to play the game on their hardware and stream it to your PC. So they're not trying to remake the industry but just provide a simple convenience service, I ever never really been sure how the economics of such a service will work but I think it has a much better chance at sticking around than Stadia because of this with additional help in not spending millions on advertising. They just need to keep up enough hardware to meet the needs of the audience using it and make that work economically.
Which is why Activision are real dumbasses here. Where a service like Origin is an inconvenience in that if you want to play EA games you have to install additional software, this is a paid subscription we're talking about to play games you already own on Steam or wherever. They might be able to make it work getting people to pay $5 a month to play the games you own at higher settings on their service, but it's not going to work if you have to pay $5 to NVidia and $5 to Activision and $5 to Bethesda and etc etc.