People buy cheap PCs because they CASUALLY play games on them, don't want to invest in graphics cards/other components that take $ (premium) time and effort to install. They probably do other work/browse/etc on the PCs, so gaming isn't a priority.
So Valve making an assumption and gamble here that people just have ~$600 to invest in a gaming machine (at lower performance and functionality than current consoles) is quite the stretch. Not putting Netflix or other Streaming apps on it also limits the market here, many people that have consoles want those options.
It's an interesting gamble, especially because it's being released presumably within 2 years of a XBOX/SONY console refresh.
I have a Steam Deck, and even with Deck compatible games, there is somewhat of a learning curve for every new game versus the same experience on a console. It's enough to not bother. The battery life is also kinda meh, I ended up playing a few Deck games and then put it in my closet and play my PS5 Pro instead.
Steam has Cheaper games as it's bread and butter. Quite the gamble for them.