The Steam Machine is surely meant to be somewhere between mainstream and niche. It’s going to be cheap enough to be a pretty good deal for what it is, but I think those who are already PC builders (at least, those who aren’t unusually high-income and will toss money at a novelty) might not jump on it.
The device does offer some unique features you can’t get on the PC market like HDMI-CEC, which will make it a great living room box.
Perhaps it’s even being somewhat underrated as a PC on your desk type of solution. Perhaps the type of person who wants a small form factor plug and play solution at their desk and isn’t a small form factor expert would want it. The only barrier there is that SteamOS doesn’t bring you to desktop mode instantly, but in that case the user could install their own OS like Bazzite or Windows.