Some food for thought: When the PCE had its big announcement in the summer of 1987, going on sale that October, the following expansions were also announced and "pictured": CD-ROM, LCD TV attachment, keyboard, computer connectivity, modem.
Interesting.
It does not actually say CD-ROM. It says CDs for background music. That is the only mention of how it will work; there is nothing about software on discs. I wonder when that info came out?
Also, the system costing 30,000 yen with one game and only coming with one controller is enough to make us go "ouch".
There is no relationship to the way game systems were sold in the 80s and now.
Now people choosing a game system are motivated primally by one thing; the want to buy whichever system will eventually "win" the console war. Fear of being the kind of loser that got f*cked by the Dreamcast is what guides them.
Back then a lot of shit we are sick of now had yet to hit a wall. People were excited by new technology, not "apps" but shit that did stuff undreamed of months before. Walkmans were shrinking, Laserdisc was in full swing. Sony had their ES line of stereo gear. It was like how people are with cell phones now only with everything. Computers, home video, synthesizers, cars...digital watches. All that shit was changing fast and it was very exciting.
Now people want stability more than anything and while they are addicted enough to pay any price they are on the whole extremely cheap these days. So to pull a SuperGrafx would be total bullshit. The original SuperGrafx would have been just as much of a f*cking, you are right, but it's not just loyalty and rose tinted glasses. People really didn't care that much about it back then, not like now anyway. The PCE fans are people who did Betamax and projector TVs and always used Metal type cassettes. These people are proud of inconvinence, like how guys who are into Jeeps mainly just talk about all the shit they break on them. It proves your love. PlayStation 5 fans are the kind of people who have motion smoothing turned on on their TVs and bitch when Netflix raised its price $2. Passive consumer drones, pretty much. They don't need to be hardcore because there are a billion of them.
My only concern in those days was where my pacifier was, but here are two things to consider.
1 - In Japan of the 1980s, a strong majority of the gamer demographic still hadn't finished high school yet, and almost nobody was over 30. Even amidst the famous economic bubble, to which we probably owe Hudson trying something like a CD attachment in the first place, most gamers didn't have the disposable income for that devil-may-care approach to picking up pricy toys.
I looked up "PC Engine memories" in Japanese. One guy said "The PC Engine was what rich kids' parents bought them after they got bored of the Famicom."
And of course, NEC wanted to get into the console business in the first place to indoctrinate kids into the NEC brand.
2 - Japanese people have always been fairly picky and savvy consumers, if not without their quirks. I've read a lot of text from the period that shows that Japanese gamers were already well aware of how software made the hardware and how important 3rd party support was. Price, of course, was always in there. With hi-fi AV equipment back then or smartphones today, the features and fashionability may have a high turnover rate, but at least they always work. In the case of gaming systems, however, I think Japanese people knew that if it didn't build up a library of software, it was worthless.
I agree, the pile-up of bodies on the battlegrounds of the console wars has had an effect. However, I don't agree that it really changed everything. The PC Engine with the CD system was
quite an extravagance, and people weren't going to buy it just because it was the latest thing.
You're hung up on the whole "a console mustn't change or be expanded" mindset, probably because your personal memories of games really start at a time when the whole market, and marketing had stratified into distinct segments.
The early to late 1980's were the Wild West of home computer and videogame development. Anything could happen as people and companies experimented to see what could work, both technologically, and in terms of consumer acceptance.
Back then, a PC was just a Personal Computer, IBM hadn't wiped everyone else off the map.
It was an exciting time. 
Perhaps.
But I still think that the CD system looking effectively like a console of its own doesn't require an awareness of the console-concept to work.
You were a computer programmer in the 80s; your perceptions are colored, too. What if you were somebody's mom? A housewife, with a salaryman husband, and now your kid wants you to buy this dumb CD thing? He tells it's just a peripheral like the light gun for his old Famicom, but you look at the price, and you see a separate shelf at the store full of different games. When you gave him the PC Engine on his last birthday, you told him it was the only new console he could have. Now what?
CD games started out as an "extra" and remained that way until the SFC/SNES blew the entire HuCard market out of the water in 1991 ... and then Hudson still kept on releasing HuCards.
The advertisement above looks like CDs are an extra. It looks like the Hucard is going to detect a CD player and use it for BGM. A library of exclusive CD games looks like something else...and you know what I'm going to say that is.
How was all this advertised, really? I include myself when I say that we probably can't get an accurate sense of how consumers perceived the system until we see more of how it was presented.
None of the peripherals in the ad ccovell posted actually say anything about exclusive games. For all consumers know, every single game will still be playable on a base system.
Errrr ... what???
It's dishonest if Hudson didn't want people to think that the CD system was going to have exclusive games. It would be just like Sony advertising their new system as the PS4.5 while quietly acknowledging internally that it's going to get a lot of exclusive content and effectively become its own console.
The CD system as it was released probably made some consumers afraid that Hudson and their third parties were either going to spread themselves too thin, or that they were going to abandon the Hucard system early.
The latter might have been exactly the decision Hudson made in 1991. How do you think the gamer with the base PCE only felt when Hudson implied "You just need to get this 'peripheral' and you'll be fine?"
What's cool about that is they were all announced months before the PC Engine even launched and they all came out.
Well, two out of five, anyway.
