Serious gamers, the early adopter market for OnLive, already had purchased an XBox 360 and/or PS3. Since OnLive, as far as I can tell, didn't have any compelling, exclusive titles, and provided a gaming experience that was inferior to alternatives, there was no reason for a serious gamer with a console to try (or switch to) this new platform.
OnLive needed to launch around the same time as the other consoles and deliver a superior experience, or an equivalent experience but at a lower price point (upfront and over time).