True, there is nothing really wrong with a plain steel frame and steel wheels in good shape.It is mainly weight.In the late 60's early 70's 10 speeds with cheaper steel frames and wheels weighed 35-40 LBS(like the Varsity etc)!!
But, usually older plain steel frame/wheel bikes are *** because folks didn't take care of them.The Chrome Moly aluminum wheel bikes are usually in better shape since folks took care of them.The older Schwinns in decent shape are just too expensive-$75-$150 for what you want.
If you find an older plain steel frame/wheeled bike(not a Schwinn since folks kinda' collect them, and it drives up the price) in good shape for $25, sure buy it.
Chrome Moly frame/fork is a decent marker for a bike worth buying.It will be 24-28 lbs.-really nice maybe $150.
Nothing wrong with aluminum frames, of course.
If the components are kinda' pretty(nice finish, not crudely stamped or cast), it usually means they are good quality.You can spend some time learning the component lines, but looks/finish/ will tell you something. Light weight is usually a decent marker for quality also.
Plain steel is fine, but tougher to find in good shape.Lots of WalMart bikes($70 new) are plain steel or cheap aluminum. If you don't mind the stigma, they are usually functional. I would rather pay $150 and get a better used chrome moly, but $80 more is $80.
Luck
Charlie