The people buying this will be a small niche who have a lot of disposable income, already have a high spec gaming PC and a Steam library, and likely already have a laptop or handheld before considering this as a third device for the living room.
At these prices, it's not going to convince console gamers/more casual gamers to move to Steam.
Steam Deck was also vastly more appealing at launch when the base model was £349 (64GB/LCD). It now starts at close to twice the price, £649 (512GB/OLED) despite the hardware being kind of old at this point.
Exactly what I’m thinking.
I'm considering it, but as a replacement for the desktop gaming machine.
I'm already running Linux on the desktop. I don't use it for anything else, I have a MacBook for non-gaming. The desktop is due for an upgrade soon, and upgrading to a Steam Machine makes total sense to me. I don't have to deal with driver issues, and I get a supported config that will just work with my steam library. I might have to put my current SSD into a cage and add it as an external drive somehow, because I don't want to download a couple of TB of Steam library.
I don't give a shit about graphics quality - I play games for the gameplay not for the graphics, and mostly play strategy games anyway.
I already have a Deck and love that for travelling. A Machine as a non-travelling version of that would be great.