While the vast number of new titles on Steam has had a negative effect on a lot of us, I don’t think there’s really an easy solution here.
The biggest problem is a lack of exposure for new games because you scroll so quickly off the New Releases list. That particularly hurts indie developers as they have less money to spend on things like marketing. But ideas like free demos and stuff, that’s ridiculous. Best thing you can do is make a game that stands out. The better games still make a ton of money. Upping the entry free is not a solution. That just makes it more difficult for indies.
I honestly don’t even think it’s a problem with Steam at all. I think the issue is that there are so many solid packs available for both UE and Unity that it has become a lot easier to make games. That isn’t a bad thing. It does mean that you are going to see a lot more games that are subpar or mediocre than you might otherwise, but you are also going to see some gems that would have never been made 10 years ago.