It was always a bit more expensive to insist on arbitrary counter-intuitive requirements like an arbitrarily tiny non-standard form factor.

There really is no actual benefit of that thing being that tiny. Obviously, there is space for a massive TV. That TV isn’t sitting on the floor. Logically there is a lot of space below that TV. Just put a desktop PC there.
And people actually had office-desktop-PC-sized VCRs in their media racks below their CRT TVs for a long time. There was space for that. And the classic HIFI towers which dominated living rooms two to three decades ago are massive compared to a desktop PC.

Handhelds are obviously a very different thing. It makes sense for them to be Steam-Deck-sized. The form factor actually makes sense for a mobile gaming device. It’s just the stationary mini PCs where the form factor is just the pain without any actual gain.