As someone who lived through the era, I totally agree with DaddyMulk. Although people criticize the visuals of Altered Beast, it was a game that captured alot of people's attention. Personally, I think SEGA was very smart to include this game with the console. Sure the game is short. But you have to remember, that the games from that era were not simply tossed away after you completed it. The game had high replay value. If you played it on normal and beat the game, you ramped the difficulty again. If you beat on the hardest difficulty, the next challenge was to beat the game without getting hit. This is exactly what I got the game. I can bet that my experience was similar to what other kids experienced in the cafeteria or on the palyground. When a kid found out you owned a SEGA Genesis in 1989/1990, they always brought up how awesome Altered Beast was. Now as games got released over the next year or two and visuals got better, this title slowly drifted from people's memory. But it served it's purpose: The release of Altered Beast demonstrated that you experience an arcade game in the comfort of your own home.
Alot of people argue that a better title should have been packed in with the system but I disagree. For a company to introduce a console to a new market, sales were very good for SEGA. So why would SEGA throw additional revenue away by packing in a better title?
It would be interesting to hear what other members perceptions are about that particular time in gaming and what impact the game Altered Beast had on people's perceptions at the time.