Everyone always forgets that DC was hampered by its game library. When I mean that, I don't mean it was a bad library, but at the time, it wasn't what people wanted. Dc's most famous games at the time were arcade games in a time when arcades were dying in mass numbers. DC had some of the best 2d fighters - mark of the wolves, third strike, mvc2, last blade 2 - during a time when 2d fighters were seen as inferior to 3d fighters. DC had Soul Calibir and Virtua Fighter 3, but for the most part there was no reason for Johnny or Mindy Average to invest in a DC for those games when you could get Tekken 3, which was cleaning up shop. If you liked 2d fighters it was far more prudent to get Street Fighter Alpha 2 or 3 as well. No one knew there even was a Street Fighter III, much less a THIRD SFIII, because again, arcades dying.
Despite DC's lineup being AAA if you have discerning tastes related to specific niche genres like fighters - especially fighters and racers - they came out during a time when some of those genres were starting to wane in popularity. Why pay 50 bucks for Crazy Taxi when you spend 50 dollars on Final Fantasy IX instead and get 50 hours of it? Kid I know in gym complained he beat Crazy Taxi in one sitting. Classic game, but came out during a time when people's tastes had shifted.
There's a lot batting against Dreamcast. That happens to be a fairly large reason, and given Sega's arcade roots, they were fucked either way.
Great thing about Dreamcast is that, much like ps2, it's still worth having hooked up to your tv right now depending on your taste. Capcom is never making a Power Stone 2 HD or a Project Justice HD. Not happening. Or that fucking fighter with the robots. Cast is still the shit. Ps2 is the last great system for retro fighters though.