In my experience, Steam isn't necessarily flooded with "crap" games, just a lot of games that have already been done, perhaps oversaturated genres. The first set of pixel art, platformers sell well. The 5th set is just beating the genre in the head over and over again. Yes, there's going to be the occasional shovelware, but they're not the majority or even plurality by far.
I think Steam needs a system for removing games with absolutely **** ratings, and a system to prevent that from being cheesed. Shovelware should be removed, but we shouldn't be removing half decent games along with them.
Or perhaps even better, an algorithm to sort games by their types. The Discovery queue does an alright job at this so far, but there's room for improvement. Sure, I might be sick of retro art platform IVX, but there's probably a market for people play nothing but those. If games can be sorted in a manner that lets consumers find the games they want to play, then it's not really an issue.
My gripe with Steam Direct is that I'm uncertain of its efficacy. It puts forth a very high barrier of entry (essentially risk), and the developers who put a lot of time and resources into a game are already shouldering more risk (in terms of time and money spent) than people making shovelware. Yes, it might stop shovelware, but it can sure as hell stop a lot of decent games from going on as well.