Regarding the low gpu memory, I've heard and read it posited that with the higher RAM will allow for better frame gen where the bottleneck is more RAM than GPU memory. I'm not a tech guy, so idea. Seems plausible enough, but we'll have to see some real world numbers.
As to the pricing, I've always viewed it from a valuation and comp perspective--just what I do reflexively. It appears the new Steam machine is slightly below the power or performance metric of the PS5 standard version. So, if it's priced above the PS5, it's a no go for me. Kind's like I just can't pay over $60 for any game since it was the asking price for ER.
From the components, it appears it would cost around $700 to build the Steam machine? So, unless Steam is willing to subsidize the unit or attach the rumored (highly skeptical, but anything is possible) new Half-Life to it, it'll be interesting how receptive it will be for "causal" gamers.
However, if according to both Sony and Microsoft, the days of subsidizing hardware has come to an end, then it's all fair game, and we'll have to reset the valuation analysis and proposition.
PS - For gamers who play online, they should have a higher pain threshold by factoring in an additional $10 - $15 per month PS requires for online play. Since I have zero interest in online anything, this cost is zero for me.