To me, the third party stuff is what hurt the most. Having Capcom, Konami, etc., on board in the US would have been huge as their games were immensely popular in the late 80s/early 90s.
But those 3rd party problems existed in Japan, as well. Capcom didn't develop a single game for the PCE. All the Capcom games on PCE were converted by other companies, usually NEC Avenue, and several did make it to the US. Konami didn't hop on the bandwagon until the PCE had been out for several years. I think the first PCE release from Konami was almost the very end of 1991. Assume Konami was interested in seeing their titles released in the US at all, there would have been a 6 mo to a year delay before their games were released here, meaning we wouldn't have seen anything until summer of 1992. By that time the TG was already hurting, and I'm not sure a couple Konami shooters would have turned things around.
I think the 3rd party games the TG would have really needed in order to succeed in the US didn't exist in Japan. Basically, the TG needed solid 3rd party support within the first 2, 2.5 years of life, primarily in the form of TurboChip releases. The TG had some great games available in that span, but not enough, and certainly nothing that made the system a must-have for most of the populace.
One reason the Genesis was so popular in the US despite not having a successful history outside of the arcades was that Sega hit their software hard. Sega, like Nintendo, cut deals with publishers and provided dev tools and assistance and whatnot in an effort to get things moving. Nintendo's anti-competitive behavior didn't seem to hinder the Genesis much the way we accuse it of hurting the TG-16. I think that should illustrate to us that a Nintendo handicap didn't have to be fatal for the TG.
In fact, I think both of these points make it pretty clear that Hudson/NEC's biggest problem was a lack of creative developers with insight to a market beyond Japan. Nintendo and Sega both had very strong first party titles that really carried their systems. While many of the best games on the TG/PCE were first party, they didn't have the kind of broad appeal that Sega and Nintendo managed. Sega and Nintendo were simply much stronger first party developers than NEC/Hudson.