That's an interesting article.
I agree that it would have been hard for NEC to take the #1 spot in the US, but #2 or at least a large profitable niche were attainable.
Here are my initial thoughts:
* In terms of controllers, a pack-in (or built in TurboTap) would have been nice... a pack in would have helped with a couple problems, i.e., only one port and short cable length. Also, a 3-button controller would have been nice around the time of launch (many games use run for this function anyways, and as silly as it seems, I recall my friends pointing out how superior the Genesis was because of an extra action button)... two buttons, just made it seem NES-like.
* They should have focused on the CD aspect of the system earlier on. E.g., include a pack-in game and lower the price... or just market an integrated system from the start (CD plus core system portion side by side would be about the same size as the turbografx-16)... they did not abide by the current concept that you sometimes have to take an initial loss on hardware and then make it up on software sales)... making it an expensive add-on made the installed CD-rom base ridiculously small. In 1989, they might have been able to get away with charging $149 for the base system initially with $249 for the CD with a bundle discount of $349 for both... with then price drops to $99, $199, and ~$249-279 when possible... that could have made things more palatable.
* In the end, more games and third parties would have helped as well... as soon as Bonk came out, that should have been added permanently as a pack-in along side Keith Courage. Getting EA on board earlier would have helped... John Madden Duo showed that the system could handle those games... NHL was a huge reason I ever even touched a genesis... the TV Sports series (aside from TV Sports Basketball, with which I have a strange fascination, just did not compare). Of course, the issue of actually localizing more games has been beat to death before.