Where are the rest of you putting this particular Adventure Path Plug-In? Near the Smoker? Outside the Shackles altogether (possibly closer to Mediagalti)?
I'd put the Steam Island somewhere on the western half of the Shackles. It's closer to the sunken continent of Azlant and in an area that's a bit wilder and out of the way. Skulberd Craggs is an up and coming Pirate Lord, but he doesn't have enough power to gain lordship of one of the larger isles. Putting Steam Isle in the chain of islands that go north east from Garnet Island wouldn't be a bad spot, this puts near the Smoker too, making it more likely to be volcanically active. It also puts it close to the Island of Empty Eyes, good for raiding the PCs' base while they are away. :-) As always, this is up to you as GM (and like you) I can easily see it being outside the Shackles to the west or near Mediagalti.
Thanks for the feedback! The chain near Garnet Island is a good idea. The Shackles archipelago always feels small and crowded to me (hence my thought of putting it elsewhere), but I like the idea of there being more than one volcanic island there.