Most systems that fail, usually deserve to. The DreamCast really didn't, but Sega's reputation and bad decisions had finally caught up with them. Many people also saw it as the true successor to the Genesis/Mega Dirve, rightfully so.
It had decent power under the hood, not as good as future systems but definitely a good jump from PS1/n64 graphics. It was the first console to have enough muscle to get somewhat decent ports of PC games. And it had a decent online setup that made the PS2 look promitive in that area at least.
It failed for a few reasons that were not really the fault of the system or the games.
Sega was broke.
Piracy was insanely easy.
Sony took the wind out of Sega's sails with a bunch of marketing BS, and tech demos that were not entirely indicative of the PS2 experience.
After the PS2 was announced, nobody really cared about the DreamCast. Even if the PS2 never lived up to the hype (it didn't) it did enough damage to destroy any chance the DreamCast had.
It's funny because Sony tried to bury the 360 in the exact same fashion, and we saw how that worked out.
