Generally, the drawback to cheap steel frames is weight. Then, too, a lot of bikes at that price point are one-size-filts-all, so if you don't fit that "average" size frame, you're out of luck.

You might check into some of Nashbar's frames, some of them get pretty cheap.

If you buy a bike as a package, you'll generally have better pricing than if you bought all those same components and assembled them.