A 1 TB Xbox is now $800 USD, where Microsoft is allegedly eating a $150 loss on each sale. Console pricing just hasn't reflected the realities yet or are eating the loss (to be made up via software sales). If their next console is open, they'll be in the same boat as Valve and won't be able to sell the console at a loss as there's no guarantee software sales will follow.

Like for an espresso machine or a printer, the incentive is put on the consumables. Peoples trust Steam and their frequent sales, not so much XBox and the rest of the platforms, so if you want to frequently buy a plethora of games, old and new and indie and AAA, it would probably still be cheaper to get a steam machine than the next console with their limited catalogue and fixed prices.

The new games tend to cost the same on both. Some do prefer gaming PCs, others have consoles for cost or ease. Steam Machine doesn't change that, it's another PC, actually a bit harder to use for this cause you're dealing with Proton unless you install Windows.