The Sega Saturn and Atari Jaguar. Sure, both have powerful CPU's (although the former has less-than-stellar sound channels), but the fact that they were not well documented or hard to program just crippled these consoles a lot. Doesn't help that several Saturn games also appeared in the PSX and N64, and played miles better than in Saturn. Which sorta saddens me, as a Sega fanboy. Now that some people are better programmers, I hope we can see a bright future where these two get more (homebrew) developers, fans, and et cetera.
Watara Supervision, Bitcorp Gamate, and Super A'Can similarly also have some potential to compete against Game Boy (for the former 2) and SNES/Genesis (for Super A'Can). Such a shame Taiwanese/Chinese developers still revelled in pirating stuff, instead of maximizing their (these poor consoles') potential to compete with international (particularly Japanese) video gaming industry.