You know, a lot of folks like to speculate that piracy damaged the DC's market presence, but the DC was market viable for such a short time, and on the decline so quickly, that I don't think the poor-quality and over-complicated pirate copies available at the time could really have damaged the system's market presence in any real way. By the time DC ISOs were widespread and didn't require a separate bootloader disc, the DC's future was no longer a question but a certainty. I haven't seen any data on piracy and the Dreamcast, only off-the-cuff speculation, and I don't put any stock in the speculation.
I would go so far as to suggest that the Dreamcast's failure had everything to do with Japan and very little to do with the US, much more a mirror of the Sega Genesis/Mega Drive days than the Saturn. Despite the failure of the Saturn in the US, the Saturn made Sega a lot of money in the home country. Unfortunately, Sega of Japan spent money propping up Sega USA. They also hung on too long on arcade titles alone before releasing the Dreamcast. By the time the Dreamcast was released Sega had been in debt for some time.
In truth, I don't fully understand why the Dreamcast did so badly on release in Japan. There were only a couple titles, true. And yes, the Playstation won Sony a great deal of loyalty, but the Saturn was well-loved by the Japanese as well despite Sega's trouble selling them on the Mega Drive. The fact that the Playstation continued to be supported as the Saturn disappeared from view hurt Sega, I suppose. But considering how affordable and well-designed the Dreamcast was, I still have trouble understanding why the public took so little interest, especially given how well many Naomi-based games were doing in arcades. Some have speculated that DVD player penetration was so low in Japan that everyone was waiting for the PS2 instead of buying either a DVD player or a new video game system. That argument is the best I've heard.
In the US the Dreamcast was kicking ass, despite no EA, and by the time the PS2 came out there were affordable DVD players that didn't suffer from many of the playback errors the PS2 did. Somehow, Sega USA was unable to save Sega Japan, despite finally getting everything right. Many of the best games were translated and brought over and US and European devs were well-represented. As far as I'm concerned, Sega USA did the Dreamcast release as well as the Mega Drive release, and it frustrates me that there was no way to capitalize on that momentum due to Sega of Japan's troubles.
Mathius, I find the Eidolon's Inn articles to be interesting, but lacking in references and fact-checking. The Saturn article is distinctly opinionated in places and hard to take seriously, despite containing some rather valuable insights. I'll need to read the Dreamcast one more fully, but I would be wary accepting it as a reliable source.
And now that I'm on page 3, they've already bungled a huge amount of important technical data. I can only assume the corporate politics stuff is within the realm of being correct, but the technical information they throw around in that piece is way off base in a number of important places.