CD drives were still expensive and a bit flakey at that point. It might have worked by packing in extra games.

Sega of America was just really good at understanding the US market.

Sega did a US launch (August 29, 1989) of the Genesis 9 months after the JP launch. They had EA releasing sports games on the console in 1990.

The TG-16 came out in 1987 in JP but they waited 1 year 10 months to do a US release, so it came out after the Genesis. They didn't get any US developers on board.

A 1988 release of the TG-16 combined with some decent sports games probably would have been a success.