Too expensive for the hardware and too complicated, IMO.
People who want a premade gaming rig are going to go for Consoles and people who want a PC are probably just going to stay with thier gaming rigs unless there is a price incentive not to; which as far as I can tell there really isn't. Valve also made a mistake, I think, when they posted hardware specs of these things without offering a dumbed down way of expressing what they do. Not everyone sees a graphics card name and processor and automatically knows what that means. I realize the any ad campaign hasn't really started in earnest yet but it certainly starts them off on the wrong foot with non-pc gamers who see steam machines, get excited, check it out, and come away thinking....nope.
I think, ultimately the prices will come down and a lot of these models will just not sell.