...I see the current iMac as a Laptop on a stick approach.
I have a top-spec 2015 MacBook Pro and a top-spec 2015 iMac 27. The iMac is not remotely a laptop on a stick. In actual world-world production use, it is much faster and quieter than the MBP.
...When I look at what I could build in a relatively small form factor using good quality components with a good quality monitor for much less than the cost of the iMac, then it starts to become a no-brainer....
The iMac is an All-in-One design. You cannot build anything beating that performance and form factor for the price. If that were possible, Dell or some other company would have. The Dell XPS 27 is not cheaper nor faster, nor quieter than an equivalent iMac 27. This is despite Dell being able to buy bulk parts by the thousands and negotiate special deals that no hobbiest building a one-off machine can.
You are talking about a self-built "box" PC vs a mass-manufactured All-in-One iMac. That is not an equal comparison. You can also build your own Hackintosh, just like a PC. Most people don't want to build and support their own machine but if you do, this is easily possible for a Hackintosh using a standard build template. Here is a high performance video editing Hackintosh for $998: