I know they will sell, but at this price point I don't understand who is supposed to be the target for this. Either you want a gaming computer, and you'll get a much better one that can be upgraded in the future for the same price, or you want a console, and you'll never pay a grand for it. 4 years old hardware and poor connectivity.
I want a simple UNIX workstation that "just works". Apple broke this promise to me with Tahoe, where horrific design decisions compounded the bugs on essential peripherals (Tahoe began spinning up and down my external raid array to sleep constantly, for no reason, making extremely loud noises as the drives repeatedly if it's idle, forcing me to constantly touch files in a while loop over dozens of partitions -- also…
I really can't think of a single use-case where the Steam Machine is the right choice actually, unless your one and only wish is to make a donation to Gabe.
You can have the same performances in the same form factor with the same OS (but more upgradability) for less, or you can improve on any of those points for the same price.