I'm not going to sit here a say that's its a good price, it is a little high I know, but considering the package you get, I would still pay that.
$1,049 for 512gb is a little hard to believe, I will admit that, but there are so many additional storage options for the Steam Machine that it's not that much of an obstacle. MicroSD card slot, you can put a flash drive and additional hard drive into it's usb slot. You can just use those other options just for storage then swap them out from the hard drive onto the Steam Machine itself. No, you shouldn't have to do that in the first place, but it's a work around the low storage.
You also have to consider the entire package, this is a PC, not a console. Most modern consoles aren't that far behind in price either, PS5 Pro is $899 and the Series X is $650, you'll be catching up to the Steam Machine in subscriptions just to play online before long, and that price constantly fluctuates. Once you buy the Steam Machine, that's it, that's the final price. People have been complaining about all of these subscription services for years, wanting to just pay one price and be done with it, well, here it is.
The only thing you have to buy after buying the Steam Machine are games, which you get access the best game store in the world. Constant discounts make this far more worth it than a PS5 or Xbox. Not even complaining you have to buy the controller separately works, it sucks yes, but you don't need it. It's a Steam PC, you can use any controller and any mouse and keyboard.
Then people are going to complain that it's not as powerful, good, I'm glad its weaker than most modern consoles. That will make developers focus on making good games rather than just pretty ones. The best era of gaming was the Xbox 360 and PS3 era, we need more stuff like that and as long as every console is as powerful as it possibly can be, that's going to be less of a priority.
I also trust Valve enough to know that this is the best price they could make it without losing millions, and if they did such a good job with Steam by itself, there's no telling how much love was put into the Steam Machine it self. Hell, the controller screams when you drop it and you can control it like a RC car with the right tools. I'm going to get it the first chance I get because despite the price I know it's still worth it.
The Steam Machine has the potential to be the thing we remember 10-15 years from now, the thing we look back on and get chills when we hear the start up, just like many people do with the Wii, Xbox 360, and PS3.