I would pay 700 for the 2TB bundled with the new controller.
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I mean I have a pretty decent laptop i can plug that into my TV with out needing steam to provide gaming hardware..
Personally, I would be interested in a different type of Steam Machine: A shrouded motherboard as a sort of LEGO base, into which you place modular blocks or cartridges that contain the PSU, CPU, USB, RAM, Wi-Fi, audio, drives, and graphics. Each block can have rails, to provide connections for power and signals, so that users don't need to futz around with wires. Just plonk a brick down onto the rails below it, and you are good for that part.
Would it actually work from an engineering perspective? No idea. All I know is that I would replace parts of my PC more often, if I didn't have to worry about screwing up in some fashion.