Steam Machines offer console gamers something that would blow their UUDDLRLRBA minds - competitive pricing.
Valve might be the most dominant player in the digital distribution market, but it's not the only player, and it seems to have a much more agile relationship with publishers regarding sales and discounts. AAA titles stand a chance of being picked up at a significant discount to their Sony/Microsoft equivalents, even pre-orders.
A couple of people have posited that people might not buy this if it was for sale in Best Buy next to a PS4 and an XBOne, but there's still a really good value proposition. Maybe not one that's terribly exciting for the powers that be at Best Buy. I think a bigger problem than the sticker price is the launch line-up. If the potential buyer doesn't have a gaming rig to run Game Streaming, the current list of titles isn't exactly jaw-dropping, though Valve does promise to reveal more "AAA titles coming natively to SteamOS in 2014".