Actually they were not slow compared to other machines. Initially they were developed to replace minicomputers (https://en.wikipedia.org/wiki/Minicomputer) as machines for Lisp programmers.

Instead of sharing one minicomputer having 8 MB RAM (or less) with tens or hundred users, the Lisp programmer had a Lisp Machine as a first personal workstation with GUI (1981 saw the first commercial Lisp Machine systems, before SUN, Lisa, Macs, etc.) - thus the Lisp programmer had not to compete with many other users with scarce memory availability. Often Lisp programmers had to work at night when they had a minicomputer alone - a global garbage collection would make the whole machine busy and response times for other users were impacted, up to making machines unusable for longer periods of time. When I was a student I got 30 minutes (!) CPU time for a half year course on a minicomputer (DEC10, later VAX11/780).

So for a Lisp programmer their personal Lisp Machine was much faster than what he/she had before (a Lisp on a time-shared minicomputer). That was initially an investment of around $100k per programmer seat then.

Later clever garbage collection systems were developed, which enabled Lisp Machines to practically use large amounts of virtual memory. For example: 40 MB physical RAM and 400 MB virtual memory. This enabled the development of large applications. Already in the early 80s, the Lisp Machine operating systems was in the range of one million lines of object-oriented Lisp code.

The memory overhead of a garbage collected system increased prices compared to other machines, since RAM and disks were very expensive in the 80s.

A typical Unix Lisp system was getting cheap fast, though the performance of the Lisp application might have been slower. Note that there is a huge difference between the speed of small code (a drawing routine) and whole Lisp applications (a CAD system). Running a large Lisp-based CAD system (like ICAD) at some point in time was both cheaper and faster on Unix than a Lisp Machine. But that was not initially, since the Unix machines usually had no (or only a primitive) integration of the garbage collector with the virtual memory system. Customers at that time were then already moving to Unix machines. New Lisp projects were also moving to Unix machines. For example the Crash Bandicoot games were developed on SGIs with Allegro Common Lisp. Earlier some game contents was even developed on Symbolics Lisp Machines - the software later was moved to SGIs and even later to PCs. Still a UNIX based system like a SUN could cost $10k for the Lisp license and $40k for a machine with some memory. Often users later bought additional memory to get 32MB or even 64MB. I had a Mac IIfx with 32MB RAM and Macintosh Common Lisp - my Symbolics Lisp Machine board for the Mac had 48MB RAM with 40bits and 8bit ECC.

Currently a Lisp Machine emulator on a M1 Mac is roughly 1000 times faster than the hardware from 1990 which had a few MIPS (million instructions per second). The CPU of a Lisp Machine then was as fast as a 40Mhz 68040. New processor generations had then either been under development, but potential customers moved away - especially as the AI winter caused an implosion of a key market: AI software.

For an article about this topic see:
http://pt.withington.org/publications/LispM.html

"The Lisp Machine: Noble Experiment Or Fabulous Failure?"