The reason for rejection was that the app also lets you buy your games on it without giving Apple a cut. Steam could put it on iDevices if they wanted to, by disabling the ability to buy in the app, but they correctly evaluated the size of the market and determined that it wasn't really worth their time or effort.
I question how useful this is anyway. I have a powerhouse PC and have the original Steam Link hardware that lets me play on my TV using a controller. It works great for those games that are controller oriented, but most of the really good games need a mouse and keyboard. You need a controller for your phone. I'm trying to imagine why I would want to play on my 5" screen instead of my 27" 4K monitor.
This really is an app to let you stream your game to TVs or less powerful computers that couldn't handle the actual graphics processing. The phone part is a gimmick.