Commodore had a nickle and dime marketing plan and made PC clones as well. The Commodore 65 was going to be the next 8 bit C64 type computer after the C128. But it never got out of prototype.
Mac and DOS/PC tech caught up to the Amiga around 1987-1992 and Amiga could not make a newer chipset in time to compete with them.
The Amiga was like the Mac but with true preemptive multitasking and 1/3rd the cost of a similar powered Mac. Amiga didn't earn a lot of money with the Amiga because they lowballed the price and Apple won because they highballed the price until Steve Jobs could come back to fix the company. Amiga had no Steve Jobs savior and went out of business because the DOS/PC cut into their sales too.
What they should have done:
kept Amiga extensible - kept the external bus when cost optimizing the A500 into the A600. (Instead the A600 was a crippled, slightly incompatible A500 that split the market and made it slightly less interesting to game developers.)
The chipset in A1200 and A4000 was too little, much too late. The A1200 was a case study in cheapskating and crippling an already anemic CPU. (It came with a disabled L1 cache. If it had only had 64 kilobytes of more RAM, they could have enabled the L1 cache.)
Should have partnered with SUN and made SunOS (Solaris-to-be) for high end Amigas, more powerful than what they ever produced. (They basically said "fuck you" to SUN.)
Etc etc.
It could also have helped to buy fewer business jets for the CEO, but I think that was more of a symptom of what was wrong. If they had done fewer completely idiotic moves, they could have afforded a few jets easily.
I don't think the Zorro bus was as good as ISA or PCI and the A600 was like you said it was. The Amiga needed a networking adapter to work with networks and Apple Macs later had them as default or via a NuBus slot.
Plus most of the software for the Amiga was video games which limited the system to video games it needed more business software.
PCI is vastly superior to Zorro-3 though, in both features and performance. Z3 never achieved the performance given in the specs and had quite some problems. IIRC Dave Haynie said that he would have used PCI instead of developing Z3 if it had been out at the time.
Due to this fact, piracy on the Amiga had a much larger impact on the platform than on the PC.
The final nail in the Amiga's coffin, of course, was the arrival of 3D: the Amiga couldn't play Doom (at that time), and so it quickly became the inferior gaming machine.
In the pro market, Commodore didn’t even know how to play - they treated their machines like toys. Despite this, for a period, if you wanted to make music you bought Atari, if you wanted to do publishing you bought Apple, but if you wanted to do TV and FX you bought Amiga.
Piracy was really, really not a factor at all.
What you're saying was fairly true by the time of QuakeGL and Quake 2 around 1997, but not Doom in 1993.
The way you made Doom playable was swapping motherboard/cpu/ram/vga for a 40-66MHz 486/localbus ones at a cost of multiple A1200s, not exactly what one would call 'extended pretty cheaply'.
Yes, you could; CPU+chipset (and, in some cases, + RAM, IIRC) processor upgrades which plugged into an expansion card (to power some of the support hardware) and the processor socket existed.