Valve's intent with the Steam Controller was to do things differently by providing the accuracy of a keyboard/mouse configuration with the flexibility of a hand-held device like an Xbox/Dualshock controller.
Despite the gadget reportedly selling 500,000 units in its first six months of release, it could never keep the momentum going, as gamers of either playstyle (PC/Console) found it compromising to their use case, instead of improving upon the traditional hardware experience.
Where the controller did excel, though, was modding. Shortly after hitting the market, Valve put out the controller's 3D design files for the public to get them busy with customizing the gadget and sharing ideas that could improve on the original design.
The accessory also benefited from Valve's software, which allowed for many games on Steam to feature multiple supported profiles for the controller to bring out its best gaming experience.
Ultimately, the Steam Controller became a niche product and one for which Valve no longer sees a reason to continue. The company has reportedly finished making its last batch, it told The Verge, and is now cleaning the inventory in its ongoing Autumn Sale, where a 'limited quantity' of the Steam Controller is available at a steep 90 percent discount.