There was a stretch when you had Gateway, eMachines, Dell (et al) in competition that could have resulted in machines that cheap if the market for desktops hadn't died (relatively). But even now Dell's lowest-end desktop is $350, and that's with an i3.

I wouldn't be surprised if that's an engineered price point because lesser hardware at lower prices can't even be shipped and make a profit. And frankly, if I remember back 10-15 years, there were $350 boxes back then, too, so maybe it's a minimum price/rule of thumb that was calculated a long time ago.