I mean.... It was a gamble. Internet was still young. Speeds weren't keeping up with game sizes outside a few major cities. I was mailed a few large files because it was quicker than downloading them. Not to mention the desire for physical copies over a digital thing you can lose with a bad hard drive was at an all time high.
Then people realized the internet wasn't just nerd shit, ISPs slowly ramped up their DL speeds and suddenly the thing people mocked for not being feasible is doing well because of how convenient it became.
Gabe even admits he had doubts for awhile.
I wonder where gaming would be if he had listened to the doubters. There's no denying valve has had a major impact on modern gaming