Crash was successful. Their character may not have been successful, these kind of successes only happen so often.
But they had Crash as a mascot before the game even came out. They had him outside of Nintendo headquarters in advertisements calling out Mario. They should have made their own character rather than pushing a Universal Studios title.
But I don't know the history. I need to do some research and see why things went the way they did. It had to be a slap in the face seeing their defacto mascot on competing hardware.