I ride a fixie (Fuji Feather) daily around a city that is reasonably hilly. It was $600 which fills the gap between beater 6-speed mamacharis ($100-$200) and a serious geared bike ($1000+).
It is much nicer to ride than any cheaper bike I have owned and I was happy with the price.
To be fair the problem with the Gbikes is not that they are fixies, but rather that they are super heavy. They work fine for moving around the campus, but you wouldn't want to ride more than a mile in them. I'm pretty sure that's by design.
The Swiss Army used very heavy single speed bikes, and people rode major distances with them. Of course, they were selected for physical fitness: https://en.wikipedia.org/wiki/Swiss_army_bicycle
Not necessarily by design. If they're ordering fleets of bikes, they want them cheap. Steel bikes are the cheapest around, can take a lot of abuse, and also happen to be the heaviest.
Steel bikes don't have to be heavy but cheap bikes usually are. A good steel bike might weigh 19-20lb (compare with a medium- to high-end carbon fiber bike that is 15-17lb) while the frame is only 3.5-4 lb of that total. The rest of the components make up a lot of the weight and to save weight there you have to spend more.
It is much nicer to ride than any cheaper bike I have owned and I was happy with the price.