Regarding the SGX surviving long enough to be built into Duos...
Shit like this never works, and this would have been no exception. In many ways the SGX dying as bizarrely fast as it did (I'm sure it was effectively killed before it was even released) was a blessing.
If the SGX had taken off, then we would have been in a tricky situation. Were previous owners of PCE systems supposed to basically bin their old systems purchased just two years earlier? That would suck, especially considering the price of the SGX, and the CDROM2 (planed from the begining) combined. I'm pretty sure sales of PCE in that early period were some of the best the system ever saw too. It would have been suicidal to shit on that customer base.
Of course the developers could have made everything a Darius style hybrid HuCard, but everyone who understands the concept of rational thinking knows that this wouldn't have been worth it either. For the SGX's super powers to truly be taken advantage of you'd need to build the games from the ground up to be the best they could be. A hybrid card isn't going to make the most of either system. Software designed to scale up and down to different power levels and configurations always suffers. The biggest advantage of consoles is that you know EXACTLY what every user has so you can make the absolute most of the hardware, down to last byte and CPU cycle. A hybrid HuCard is going to lack running under one or both modes.
The SGX shits in the face of the entire "core" concept that the PCE was based arround. You can't upgrade to the SGX like you can with different system cards or CDROM addons. You have to chuck your 25,000 yen system and buy another one, and for what? Power upgrades that to this day haven't been proven to really be worth two shits, let alone another $200 on top of the price of another PCE (most of the hardware in which, owners of standard PCEs already bought once). If SGX capabilities were something that could be added to any PCE, and eventually incorporate into Duos for free (like the Super System eventually was) then yeah, f*ck yeah, obviously that would have been awesome. Unfortunately the dipshits that created the SGX made a setup where that was impossible.
The SGX died so that we could have a non-fragmented user base during the SuperCD and HuCard eras, and it was totally worth it. The best PCE soft came during the periods when most users were all on the same page, hardware-wise. The PCE already has the most confusing matrix of system configurations in history, adding SGXCD, SGXSCD, and SGXACD to that list would have meant less customers, less software, and probably, honestly, worse software.
Also, f*ck Mortal Kombat. It would have sold a few systems in America, sure, but then what? MK2, MK3, f*ck that. Some things just aren't worth the psychic price.