Atari was never second to the CV even in 82, I mean the VCS caused the crash in 83, a lesser system would not have done so. So the 5200 was second to the CV, but hey the 2600 was still 'the kaiser'.
The 7800 was never intended to be released before the 5200, the Maria chip hadn't been out yet, also, pre 7800, GCC were busy creating arcade games for Atari and 2600 carts and 5200 carts too, but starting in 83 with the 7800.
The VCS was also constantly updated (although not released), the 5200s life was not cut short, it didn't live up to expectations, so by 83 a next system was already in the works. Atari was always designing more systems.
The 5200 did have updated games of previous 2600 games, not the same, think Super Mario Bros, Nintendo's been doing this for years. Read the Arnie Katz interview, the scope was different, that's all.
The 7800 was released in 1984, but the video game crash in 1983 and sale of Atari cut its life quite short. Atari had big plans with the 7800, bringing, for the first time, real 'arcade like' looking games home, eg MS. Pac-Man (programmed by Bally for the 7800) etc...
When NES came about and got popular by 1987 (one year after the 7800 release), Nintendo made all all NES game developers/publishers to sign contracts which forbid them to release the game on other consoles. Due to this illegality Atari could not have had Japanese arcade titles, which at the time, became hugely popular by the Americans.
Atari was not 'just lucky' with the 2600, Atari Corp was extremly popular with the ST range of computers, selling all over the world, very well in Europe and to musicians due to the inbuilt Midi ports/capabilities, and the Atari Corp. 8-bit range was very succesful too.
If the crash in 83 wouldn't have happened and Atari would not have broken apart, it would have distributed the NES in the USA, like Nintendo wanted Atari to do so, and it would have been another big seller too.
(Remember how it took Nintendo almost 3 years to popularise the NES in the USA (AVS showcased in Jan 1984), it wasn't plain sailing for them you know).
The 7800 would have been history by then.
By early 90s Atari would have distributed the Genesis in the USA, like Sega wanted Atari to do so, it would have been another huge seller too. Atari would have been 'god'.
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