With steel you're pretty much required to have a geared down motor driving a separate spindle to get low enough rpm. I built my machine specifically for milling aluminum and the Chinese 2.2kw spindle is excellent for that, but with an rpm range of 6000 to 24000, sfm is too high for steel unless running tiny endmills.
Not sure what your budget is, but I've been dreaming about a servo driven spindle. Huge capability there. Full torque down to 0 rpm, will do any synchronized operations like rigid tapping, hobbing gears, etc. Dmm servos seem to be very popular and pretty affordable. I think about 500 bucks for the 750 watt servo/drive kit, 700 for the 1.8kw kit. For the size you're building, 750watt is probably plenty. Throw it next to something like a taig mill headstock/spindle, or a tormach bt30 spindle cartrige but that's getting a bit bigger. Not that you need a servo to drive your spindle. Just seems really cool to me to have the capabilities it adds for not a ton more money. Can also just drive it with a motor.
If you can give up cutting steel with anything larger than a 1/8 endmill, the Chinese spindles are really convenient and relatively cheap. For smaller spindles at low enough rpm for steel, I'm not really sure what options there are other than something like the headstock on the taig, but im curious if anyone knows of any