I have tried a fresh install of steam, and another completely fresh install of the game as requested and there is no change in situation
There are no issues with my antivirus, or firewall blocking the application either.

I have resolved the issue. There is an incompatibility with the application Spacedesk (http://spacedesk.ph/). WI had been trialing this software to allow me to use a tablet as a second monitor.

I found a recent report from someone else on an internet forum identifying this application as the cause of the problem. Since I have uninstalled Spacedesk Arma 3 will now launch again.

I hope that the incompatibility may be identified and rectified in future updates. I hope this helps the process.

I'd like to report that this is also an issue in windows 8.1
I have tried reinstalling the game and running with a new windows user but this makes no difference.
I deleted all Arma related reg keys before the reinstall also.