My understanding of the policy is that Valve requires the Steam price to be lowered to match the other vendor, not necessarily that the other vendor’s price be raised to match the price on Steam.

I don’t think it’s fair to say that they have nothing to do with other store fronts because they affect each other. If the apple farmer I work with sets up a stall across the street with prices lower than my shop, that’s going to impact my apple sales. I might look into sourcing cheaper apples or dropping the fruit entirely from my selection. Why should I be forced to stock their product?