It's sad that advanced hardware rarely saw full use. There are a number of examples, the Atari Lynx, Epyx TurboGrafx 16, Sega Genesis CD, Sega Saturn, and more.
In particular, the Sega Genesis CD had a second 12MHz 68000 running parallel to the 68000 in the Genesis, as well as a 3D graphics engine, which IIRC only two games ever used.
Nintendo hit the nail on the head: addictive games on simplistic portable hardware with simple presentation. Whereas others did what they could to squeeze console performance into portables (eg Lynx, Nomad, etc.)
We're only just recently into the age of demanding the same performance in our portables as our consoles and desktops, and now we have the technology to support it. Along the lines of the Nintendo DS and Sony PSP.
And on minimal battery consumption :-)
I love my Nomad, though toting full-sized Genesis carts around is a little cumbersome, and my NeoGeo Pocket. I never got into the Gameboys because I was always attracted to the better hardware, then disappointed when it went away (think, Amiga.) The Lynx is nice and has some cool games, but I only have a Lynx I, and it's a tad awkward for portability (aside from the fact that I've boxed and lost it somehow.) Batteries can be a problem for all, unless you build a nice custom NiMH pack with outputs for all. Handy.
EDIT: I also understand that programming the Saturn was a bear and-a-half, something akin to programming two 2600's in parallel (timing, and what-not.)