To most of us, Atari was dead before the 5200 was ever released. Atari's lack of quality began to become apparent (some would argue) even before Pac-Man. Not tom mention all the internal struggles with the company, and the early VCS programmers...
Strike 1 was that abortion they released called Pac-Man - and lets just say, even at Strike 1, Atari couldn't just play this debacle down - Pac-Man was the biggest game in the world, at the time. To alot of people, that was strike 1, 2, and 3, in one blow.
Strike 2 was ET. None of us knew, nor cared about how much Atari shelled out for that steaming turd, until we found out it was the cause of all of Atari's problems.. We just knew it was an awful game. Most of the time, when a player fell down a pit, it was time to find another game to play.
Strike 3, and the out was the 5200.
I vividly remember playing the 5200, for the first time, at a Target, way back around Christmas of 1983. Target made the huge mistake of having Pac-Man being the demo game for the kiosk. Trying to play Pac-Man with a 5200 was a nightmare, since the stick wouldn't self center. And Target even had one of those metal "contoller guides" that you put over your 5200's controller to make games like Pac-Man "easier to control". When in all actuality - it made playing it much, much worse because it seems like the controllers would never calibrate back to center. Instead of asking for a 5200, that Christmas, I asked for a Commodore 64.
As for skipping on the Famicom.... I'm actually glad they did. Atari wouldnt've marketed it, and let it fail. Nintendo would probably never attempted to release another console here in the US, until probably the N64. And I don't think Zelda, SMB, Metroid, and all the other games we came to know and love during the NES years would've gotten the attention they did then, and still do now.
The Atari/Famicom deal has always been a fascinating hypothetical, to me...
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