I imagine that developing for the PS3 has gotten better over time.

The real difference now is that they have had experience with developing for the 360 and it doesn't suit they're style. Many of Valve's most recent games have been of the multiplayer variety, and they have a strong ethic of continuing to tweak their multiplayer games over time, adding content, tweaking game balance and game mechanics, etc. This style of development, which is familiar to anyone who's played PC multiplayer games over the last 2 or 3 decades, is at odds with the way Microsoft handles game releases. There is a long QA pipeline to go through (which can be onerous if one also has their own QA pipeline) and there is a general standing policy of charging money for major content releases. And this has caused an immense amount of frustration for Valve.

The divergence of TF2, for example, between the console version and the PC version has been extreme. To the degree where it's probably fairer to call the PC version perhaps something like TF2.5, because there has been so much ongoing development in the game.

The PS3 is recognized as being the weakest platform (in terms of developer interest, game sales, profits, etc.) in the current generation, so Valve was able to negotiate a sweet deal with Sony in allowing them to put Steam on the PS3. This is no small thing, and fully explains why they have gone back to the PS3 despite the problems they've had with the console. The ability to have their own way in terms of content updates is enormous for Valve.

tl;dr Developing for the PS3 may be more technically frustrating but Sony's huge concessions mean that Valve gains the freedom to deliver game updates on their own terms which more than makes up for the technical difficulties.

Those are interesting points. I wonder if graphics are now at the point where the PS3's Cell architecture, which seemed needlessly complicated before, is now starting to look like a point in its favor. It's no secret that the PS3 is a far more capable device than the 360. Perhaps the PC market has come far enough that the ps3 is the only console capable of matching the PC in terms of graphics.