CD-ROM and memory was really expensive in 1990. I don't think SEGA could afford to make the price any lower and I don't think that was its main issue really. Also, while I like some of the FMV games, it wasn't like the Mega CD was the only FMV system or was the best at handling it either. I think its main issue was how little of its games actually took the time to use the system and show us games and graphics not possible on the Mega Drive or Snes and sadly the likes of Soul Star just took too long to get to market.
I think the story could have been so much different if for one AfterBurner 3 showed off advanced sprite scaling and rotation effects and SEGA backed that up with ports of OutRun, AB II, Super Hang-On, GF II all making use of the ASIC and with Arcade perfect music and sound effects and SEGA also looked to make better versions of Mega Drive titles. Strider could have been improved with all the Arcade intro's, speech and animation, much the same for Ghous N Ghouls or in Ecco II on the Mega CD the 3D sections didn't make use of the ASIC chip, Sonic CD was a letdown in many area's too, none of the boss battles used the ASIC chip, no use of the PCM soundchip for the bulk of the game and even the bones sections didn't use the ASIC chip to scale the UFO's; Sonic Team made more use of the ASIC chip for the clouds on the title screen and special D.A Garden mode when you finish the game it was also a total letdown that PS IV was dropped for the Mega CD too
All that said I liked and was far more Impressed with Mega CD than my PC Eng Duo. Batman Returns was just the best 16-bit driving game around and Lunar is still the best RPG I have ever played. Speaking of NEC somebody on here raised a good point and how NEC really pushed the all in one Duo and how that helped get the PC Eng CD Rom established and so got great support, while SEGA never pushed its Wondermega and the Multi-Mega came too late. Maybe, SEGA when making the Mega Drive/Mega CD II, should have also made an all in one MegaDrive/CD combo too and really pushed that, but that's with the benefit of hindsight.