Hi @vrm,
As per my knowledge, a modern site is needed if you are migrating to Steam (on SharePoint). I see some features like Custom page, site, & portal experiences for videos and Sharing in this article Current features and upcoming roadmap for Microsoft Stream (on SharePoint) are all based on a SharePoint Online modern site. Also, the roadmap of Stream indicates the integration with SharePoint Online site. From my point of view, a modern document library is not sufficient if you want to fully experience the features of stream.
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