It turns any TV into a smart TV. Compared to just using the features built into a smart TV, it has a more capable processor, more timely updates with a longer lifetime, and possibly a wider selection of apps. Compared to using something like a game console or PC, it is smaller, more power-efficient, and (if the only feature you care about is streaming) has fewer unnecessary features.
The shield isn't meant as a gaming device, it's a streaming device. I mean you can run games on it, I guess, but it's an Android device and its purpose is to stream from PC to your TV.
You can install emulators on the shield to play classic roms and you can stream games from your PC or the cloud to it. My laptop does both of those things. Plus I can install some modern games like Hades 2, block ads on every video and music streaming service, and be more in control of where my data goes.
I'm pretty sure the only thing the Shield does that my laptop won't is a.i. upscaling which is not an important feature for me.
Most people, when speaking about a gaming device, aren't talking about the ability to play things from 40 years ago that you could run on a smart toaster
Of course it depends on the OS, but when NVIDIA started showing ads I installed a 3rd party launcher. It also allows me to install apps that block and skip ads on a major streaming platform. And, if I upgrade my TV I'm not entering my info into a new system, I just plug in the Shield.