It sounds to me you have a pretty good handle on your current storage needs so I wouldn't say getting just 256 is crazy. However, there are a few things that come to mind…Buying an iMac with only 8GB of ram has been discussed ad nauseam, but what about going light on the SSD and getting only a 256GB drive?
I have a windows machine that’s 12 years old. It came with a 120GB SSD and I upgraded it to a 256GB SSD. It’s currently sitting about 60% full and I have a lot of stuff I could take off it like several years of Turbo Tax. I only use it for the system and programs. I have a 1TB drive that I store all my data. I’m going to replicate that on my iMac by using the cloud and an external drive. I’m really looking at the new computer as an opportunity to start over and streamline my system - only keeping the programs and data files I actually use.
Any thoughts on configuring my iMac with only the 256GB SSD? I’m getting 16GB of ram.
Buying an all in one computer only to commit to adding external drives seems a little inelegant to me. Of course, you will probably have at least one for backup, but in that situation I think I would go with a Mac Mini and not an iMac. If spending less money is important, do a little research, there are plenty of nice monitors out there and you could save even more money with a Mini and external monitor.
Judging by how long you owned your PC this may not be important, but if you ever go to sell that iMac on the used market 4-5 years from now, it will be easier to sell a 512GB (or higher) model than the 256GB and you may get a lot, if not all, of that upgrade fee back.
Whatever you do, I am sure you will enjoy your new machine!
-kp