The initial iMacs didn't carry a price premium, and it was actually one of the products that helped push PC prices lower. I worked at Gateway at the time, and it panicked a lot of people when it came out. It had a nice simple design, offered what consumers wanted, and was cheeper then what Gateway, HP, Compaq, and Dell were all selling at the time. The all in one system Gateway had at the time (Profile) was more the premium/fashion statement device, with very expensive for the time components like an LCD. The engineers rushed to clone the iMac in the form of the Astro, as did other companies.

If anything, the iMac was the product that began the transformation at Apple away from the premium priced products it has been churning out in the early to mid 90s.