Funny, I just saw this thread today and read through it.
Anyways, I can give some perspective of really legitimate reasons to why the TG-16 didn't fair well overall. I remember this time in my childhood vividly, due to my borderline OCD and great long term memory. :-" This is just how I and many others roughly saw things back then.
1. Third party support: No games from Konami, Capcom, Tecmo, Technos, and other third parties at that level. This of course was due to Nintendo being a greedy bitch and not letting third party companies make games for other consoles without penalty. Sega did OK starting out due to a few top arcade titles, a real 16-bit feel to it and then Sonic giving them the great boost in sales.
2. Marketing: There were no major system sellers for what most people perceived to be awesome games on it. Don't get me wrong, there are some great games that we here enjoy the hell out of. This is not the case in the eyes of your average kid used to playing major NES titles like Super Mario Bros, Mega Man, Contra, Ninja Gaiden, and so on in the early years. Then later on games like Actraiser, Zelda 3, Sonic, Streets of Rage, major arcade ports, etc.... This really boils down to appealing image of games, solid fun gameplay, character design and other marketing methods.
In the US, there just wasn't all too many titles that struck even my interest when the TG-16 first came out and when I owned one in 1991. I didn't even know what games were the ones to really get due to me being the only one owning one in my area, no commercials and no store demos. I remember really wanting Bloody Wolf, Ys 1+2, and later on Lords of Thunder. I just saw some of these games on shelves at EB Games, in Gamepro mags and a few flyers really. Compared to SNES and Genesis games though... I will be honest, my interest in TG-16 games didn't measure up. Remember, this is all back when I was like 9-12 years old and had friends that owned and showed me the other 16-bit consoles.
3. It isn't 16-bit like, it is, it isn't, but it is...: When it first came out, it seemed like a more powerful NES than it did an arcade like 16-bit console. It wasn't until later that it really matched the quality of the SNES and Genesis roughly '91-92. It took the CD-rom and Super CD-rom to finally achieve the same level and a few HuCards (Cadash, Air Zonk, Magical Chase are great examples).
I swear, if the Turbo Duo just stuck it out for another two years... we would have seen some really good titles in the US. Other game companies finally got the green light to develop games for it. We might have gotten some great CD titles like Gradius 2, Dracula X, Double Dragon 2, and so on. It still wouldn't have matched up commercially to the SNES and Genesis, but at least we would have gotten a lot more out of it.