GOG only started selling newer games in 2012, and even then it started only selling a few. Before that, it was a place to buy old games (hence the original name, Good Old Games). I think GOG's success was because for its first few years, it was selling games that simply weren't available on Steam or anywhere else at the time. When it did finally go up against Steam, it already had a decently large customer base, and was able to set itself up well a a DRM-free Steam alternative.
Indeed. First they got a market which was unserved (old games), then they got the CD Project Red games (Witcher series), then they branched into third-party games.