How are the recommended system specs determined on Steam?

From the Sub-Point "Releasing" of the Steamworks Partner Page:

Then scroll down and enter the corresponding system requirements. Preview your store page and then publish your changes when you're happy with how the system requirements appear.

So the answer is: they come from the game developers.

Just like any videogame, the developer tells you the minimum and recommended specs for your machine to run the game. Each company will have their own methods to benchmark their games, so there is no way to know how did they determine the recommended specs. Since the "goodness" of how a game is running is subjective (you might prefer more FPS, you might prefer more stability, etc), the minimum and recommended specs are something orientative, something that the developers are telling you "if you use this (minimum specs), you will run the game, but if you want to run it as it's intended to run, this (recommended specs) is what you should have.

The developer makes them up.

Minimum = worst computer the devs had kicking around that they tried running the game on and the game ran

Recommended = worst computer the devs had kicking around that they tried running the game on and the game ran pretty well

I'm in publishing and we get told that single-threaded games require i5s, games that never go over 1GB in Task Manager require 8GB systems, and 2D platformers require enthusiast-tier Fermi as bare minimums.

If they use the Additional Notes in sysreqs to say things like "the above config will run 1280x720 at 30FPS" for a minimum and "the above will run 1920x1080 at 60FPS" for a recommended, you can be pretty sure they've put some thought and testing into it. Otherwise the whole section is almost meaningless.