Nostalgia always makes things overrated. However, the dreamcast had its darn good fine points too. Problem was it was somewhat like the neogeo. An expensive, ahead of its time console that, that's basic library, at least for a majority of its games, were _arcade_ games.
Ultimately it failed because it did not have enough other games in addition to its arcade game library and could not at all compete with the other consoles breadth of games.