It's amazing how much damage a company can do to itself by releasing a major system and then failing to support it. I've always thought that the 5200 did Atari a lot more harm than people realize, and as a kid who got a 5200 for Christmas I was certainly pissed and disappointed when the console was dropped within months of my getting it.
(I was even more pissed and disappointed, of course, when both controllers were practically DOA out of the box, with fire buttons so stiff that Hulk Hogan would give himself tendonitis trying to make them fire, let alone a young kid.)
Consumers remember that stuff; it tends to turn a company into a punchline. I'm surprised Nintendo's gotten away with it twice (the Virtual Boy and 64DD).