Stupid decisions killed SEGA. Some of them, as mentioned in other posts, are so incredibly dumb that they seems to be stuff of urban legend. But they happened. Sony had a lot of hype but the first lot of games was a sad bunch of crap and Sony had zero gaming experience at the time. If managed by smart people Sega would be able to deal with that.
But, of course, smart people would had never launched the 32X (Whose only good game was Kolibri, the best Humming Bird based horizontal scrolling shooter ever made as pointed by the Penny-Arcade guys ) and that FMV games that plagued the Sega CD...