This would be great, but I don't think we will ever see that :/
This would help speed up development, due to additional contributions by volunteers. Especially since this is a popular program many high quality contributions can be expected. Additionally security can improve if there are more eyes on the source code, due to it being public. Besides it forces developers to think more carefully on how to securely write their code, because it will be public immeditately, which is a good mindset shift. I would urge people to put a '👍' on this issue. To increase the importance of this issue in as much as we can.
Nothing extracted yet.
I think the idea of open source Steam client is not so crazy. It is using open source Chrome browser, otherwise key features (friend list, game download) are communicating to secure Steam servers. Quick search brings up some community clients (did not test):
https://github.com/73cn0109y/TecnoSteamClient
https://github.com/Daniel-Griffiths/vapour
https://github.com/Jessecar96/SteamBot/