But the performance was outstanding in Dreamcast.
Ultimately, it was almost everything else going against the console. [2]
I think the more conventional marketing discussions are much more relevant. In an alternate universe where Sega hadn't burned the entire market with the Saturn, but simply released the Dreamcast at the same time otherwise, it may well have done much better. I'm not sure there is any way it could have "won", while I have my quibbles with some decisions in the PS2 hardware it is generally superior enough that it probably would have won anyhow, it might have been a more grinding war. (Bear in mind that part of this alternate universe is better support from the gaming companies because they weren't burned and they still had some residual good feelings about Sega remaining, so the DC would have been going in with more high-quality games in this version of reality.)
The simple truth is that six months into the Dreamcast's run in the US, before any of the next-gen competition had emerged, I could just tell it wasn't in for the long haul. The library was just too lopsided and the support from the big names, while not entirely absent, just was never there in the necessary quantity. The competition actually coming to market merely buried an already-dying console. But it's the only console I've ever purchased on release day and I didn't ever regret it. There was a lot of good and interesting stuff... there just wasn't enough.