I think distribution plays a role in its failure to, never once as a kid did I see a TG-16 for sale. KB toys never had it, K-Mart [which was basically Walmart in power/sales back then] never had it. I also never saw one at Sears or Jcpenny back then. It hurt the TG even more when you factor in that most of the people buying consoles at that time [usually for their kids] bought them on a spur of the moment decision, its easy to see why most people today are like "TG what? Whats that?"...It had zero distribution outside of a select few cities and buying it over the phone. And most video game players back then were young boys, really which boy was going to call up a distribution center for a TG when a NES was all the rage ?
Sega did a great job over coming that problem, much of the blame lied with Nintendo for threatening retailers. But Sega still got its foot in the door at places that mattered back then - KB toys and K-Mart. I know K-Mart in my area back then eventually had a Kiosk setup with Sonic, that caught attention and sure enough kids at school started saying they owned one.
Atari Jaguar is sort of in the same boat as the above, bad distribution [but it also had mostly bad games aswell so imo it was doomed from the start no matter what, unlike the TG].
Today distribution doesn't matter nearly as much since we have the internet and online sales which side step the brick and mortar store issue altogether. But back then it was do or die if you wernt in a K-Mart.
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