There's nothing intrinsically wrong with UWP for games, it makes a lot of sense.
I think the problem a lot of people have with it is the clout the Xbox gives them. They can basically strongarm publishers into both giving the Windows Store exclusivity, and adhering to whatever conditions MS put in place, whether that's DRM, pricing, a lockdown on 3rd party mods, etc.
Don't want to go for that? Fine - no release on Xbox. No dev/publisher in their right mind is going to kiss goodbye to a huge chunk of their market over that.
While Steam has it's issues, there's nothing forcing publishers to release on Steam (other than the popularity of the platform).