The TL;DR is that the organization that controls the HDMI standard won’t allow any open source implementation of HDMI 2.1.
So the hardware is fully capable of it, but they’ll get in trouble if them officially implement it.
Instead it’s officially HDMI 2 (which maxes out at 4k @ 60Hz), but through a technique called chroma sub-sampling they’ve been able to raise that up to 4k @ 120Hz.
However there are some minor reductions in picture quality because of this, and the whole thing would be much easier if the HDMI forum would be more consumer friendly.
In the meantime, the Steam Machine also has display port as a completely issue free display option.
USB-C adapters for absolutely everything are thankfully quite common now thanks to the laptop/dock industry.
In the sense that we have dongles/docks, sure. In the sense of monitors with native USB-c input? These are still fairly rare as the accepted pattern is that your dock has an HDMI/DP port and you connect via that (which actually is a very good pattern for laptops).
As for TVs? I am not seeing ANYTHING with usb c in for display. In large part because the vast majority of devices are going to rely on HDMI. As I said above.
I’ll also add that many (most?) of those docks don’t solve this problem. The good ones are configured such that they can pass the handshake information through. I… genuinely don’t know if you can do HDCP over USBC->HDMI as I have never had reason to test it. Regardless, it would require both devices at the end of that chain to be able to resolve the handshakes to enable the right HDMI protocol which gets us back to the exact same problem we started with.
And the less good docks can’t even pass those along. Hence why there is a semi-ongoing search for a good Switch dock among users and so forth.
Regarding the Nintendo Switch, it’s because of their engineered malicious USB-C protocol design that makes the console “Not behave like a good USB citizen should”. It’s less of an issue with the peripherals as a whole.