The Dreamcast was fatally wounded as a platform because their DRM was easily bypassed. You didn't even need a special hardware dongle or modification. You could instead straight up download copies of games that were modified to work on the system. No point in supporting a platform that was dominating arcades but whose sales were getting obliterated by piracy at home.
Internet access was one constraining factor. Not everyone in 1999/2000 had broadband to download entire CD images. And an even smaller portion ever knew where to find the piracy methods and content - most of it was on Usenet.
I had a Dreamcast at launch and still love the games that came out on it. If it had a new revision with a DVD player in it announced at the same PS2 price point to compete with the PS2 and XBOX then Sega might still be in the console business.