steam driven espresso machines are a waste of money.

Yep save your cash. If you want an espresso-style drink for around this price at home, buy a Bialetti Brikka, or an Aeropress which is just a little more versatile. Otherwise, save up another $300 and get a Gaggia - which should be your ground floor entry point for a home espresso machine.

I've heard that the under $40 espresso machines are the sweet spot.

Correct #3, you have to spend more to get one that has a pump. Steam gets your espresso too hot which makes it taste crappy. Plus you don't have instant steam.