It doesn't really make that much sense, people avoided buying Final Fight 2 because a slightly better fighting game was released on a different console, back when most people only owned one console at a time?
If anything Streets of Rage 2 sold more copies because it was a pack-in game at one time. It was produced by Sega so they could afford to do more with it. I do like both series though, they're all good games.
http://www.youtube.com/watch?v=R55DgKIKwdg
Final Fight Guy was produced because Guy wasn't inlcuded in the original Final Fight due to space restrictions, people wanted Guy so they made a game including him. Final Fight was more popular in Japan than in America so it makes sense why it got a retail release there first, it's basically the same game that everyone already bought in America so why would they re-release it mass produced? Especially when the sequel was just coming out. Even so while it was originally a Blockbuster exclusive, from what I've read it was eventually given a limited release.
It did get some negative reviews saying that it was repetitive(it's a beat' em up so that's a given), but really it didn't sell as well because Street Fighter II was out by that point. Everyone focused on those types of games at that time.