Is the Steam Machine a decently priced desktop compared to the "generic" ones?
You can't build a machine which is as powerful, small, quiet, and cheap, nor can you take for granted that a machine you build can have a controller that can wake it from sleep, or which has HDMI-CEC (both are possible, but take extra work or hardware). You can rather easily build a machine with multiple of those attributes, but you'll have to pick ones to sacrifice in the name of the others.
Compared to buying from parts? No.
Compared to an average prebuilt? You can probably find large tower PCs at a lower price, but they'll likely have a low quality motherboard or power supply.
Compared to an average prebuilt that ships with Linux? Absolutely
Wildly depends where you live.
For the same price I can get a prebuilt desktop PC with double the performance (Ryzen 7 5700 + RTX 5060 Ti)
Even if you go mini ITX you can get a better PC with 50% more performance (Ryzen 7 5600x + RTX 5060) https://pcpartpicker.com/forums/topic/498435-diy-45l-steam-m...
For a small gaming box it is a good price.
If you don’t care that much about size, HDMI-CEC or SteamOS there are faster alternatives for the price.
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Gamers Nexus did a very in depth review of the Steam Machine [1], which includes a comparison to a build yourself similar machine.
The result is that for about 70 dollars less you can put together a somewhat more powerful PC than the Steam Machine, but not for that form factor, it would still be bigger.
IMO, the Steam Machine is not a bad purchase if you are in the market for that type of product.
[1] https://m.youtube.com/watch?v=66QzlDewigE