Do those computers play games competently? I doubt they play them as well as the PS5 or Series X. We aren't in the days where integrated graphics instantly meant sub 20 FPS on any game no matter how simple, but I still wouldn't throw any recent triple A game at even new-ish computers with integrated graphics and expect them to perform all that well. They'll play Rocket League, Stardew Valley and Minecraft just fine, and maybe that's all they need to do, but a Steam Machine that can't play tomorrow's title roughly on par with current gen consoles seems like a losing bet unless the price is equivalently lower.

Yes. There's a peer thread below this one with more examples, but in general the biggest (and most relevant) cost you're looking at with a new computer is the video card. And a PS5 level video card is the RX 6700 XT which is like $200-$300. If you're willing to purchase second hand you can go substantially lower.

I suspect most of us are of a vaguely similar age, and when "we" were growing up, PC gaming was ridiculously expensive. A new gaming PC was thousands of dollars and then obsolete within a couple of years, leaving you constantly checking new release 'minimum system requirements.' It was quite painful and a big reason I (and I suspect others) migrated to console gaming. But now a days? I have a relatively old PC and never even bother looking at spec requirements - it'll run it, just fine.

The Steam Machine uses a dedicated graphics chip, similar to a discrete AMD RX 7060M. Laptop chip sure, but a stone's throw from integrated graphics. These Machines will be able to keep up.