Wasn't NEC run as a child company in full sense of the situation? I mean, didn't they have to get approval for nearly everything they did from commercials to games to release here?
Well, the machine had been built by Hudsonsoft but NEC was notorious for it's high-handed attitude toward 3rd party developers and its controlling attitude toward all aspects of the business. Remember, NEC was this humongous company in Japan and I think they really under-rated the competition, esp Nintendo.
But what really but the kibosh on the system was Nintendo using what were later ruled to be unfair business practices to keep developers who also worked for them from developing for NEC.
Business rivalry's among Japanese hardware manufacturers often seemed more personal (at least back then) than the typical business rivalry that we see among US companies.
Oh yeah, their "Mario" or "Sonic" was a goofy caveman named Bonk. Definitely finished last in that generation.