The STE was quite a serious improvement early on, but once A500 was down to £400 STE was doomed (around 1990). Also games programmers screwed over just as many STE owners as Amiga owner with games that rarely used the blitter on either.
Thing is, Commodore bought Amiga as is off the shelf (and sacked half the Hi-Toro engineers to cut costs) so improving it was no simple task and EVERY new iteration of a chipset enhancement would require herculean efforts to make new games look better instantly AND none of your old games improved.
On the other hand, playing original ST games on a 16mhz 68000 based machine is much more productive...Gauntlet 1 and Lotus II become more playable and run smoother and faster. And there is the key, the original ST and PC only needed faster CPUs to improve your entire games catalogue. So once PCs were getting their VGA graphics in arcade games as standard that was the point of critical mass (between 1990-1991). Poor old Amiga though, not only suffered at the hands of incompetent ST-ports (not even STE ports FFS) BUT even if you bought your A1200 none of the old non-polygon based games improved....Xenon II was still slow as hell like playing an arcade game sunken in treacle.
I feel sorry for Commodore because they had chosen the hardest route, all custom chip based performance = difficult to keep updating as games programmers don't write for unsold/tiny marketshare machines (ie the same problem STE owners had!). How pissed off would you be if every 2-3 years you got shafted the same way A600 buyers felt in early 1992 before A1200 was announced out of the blue that Autumn. Tricky business decisions there.
To be totally frank, the ST was a 16bit replacement for the Commodore PET, that's all it is. If it didn't have the name Atari stuck on it and came in a nice Amiga 1000/3000 style slimline case it would have wiped the floor with the original Macintosh at 1/3 the price for a superior machine. Anyone who bought a Mac or PC XT/AT in the 80s was an idiot
And it was Irving Gould who refused to upgrade the Amiga CPU, he is famously quoted as saying 7mhz 68000 is enough for Amiga users around 1990.
Of course if Commodore had sold the A1000 just 20% cheaper AND ACTUALLY MARKETED IT they would have had enough sales in the bag to make the A500 a 12mhz 68000 (fastest PC AT speed) and then A500+ could have been 16mhz plus what AGA was (2 extra bitplanes tacked onto OCS) to give reasonable 128/256 colour speed for 1990s when everyone in PC land had crappy ISA 286/16 machines anyway for home use.
And what numbnuts decided in all-in-one designs? They look like toys next to PCs and Macs sorry. How much extra does an A1000 keyboard cost than an A500 one inside the case? Bugger all that's what
