And that's really the point. Fighting fans liked SF3 everyone else couldn't get into it like SF2. That game had universal appeal. SF3 was necessarly because Capcom had to make a real bonafide solid fighter as they were losing their core audience to the titles SNK was coming out with during the turbo and super SF period.
They won those guys back but they didn't get everyone else. Order wise the game made lots of money because it was the third game in the SF series so Arcade operators thought it was a guarantee money cruncher..only to find in many arcade centres that those games weren't being played which is why 3rd strike didn't make a good number with arcade operators.
Yes, I agree that speaking in terms of popularity amongst the masses and general audience, SFIII isn't what SF2 was. SFII was a phenomenon that hasn't been matched by anything Capcom has done since.
I don't know if I would say they lost their fighting game core audience to SNK though. I believe Street Fighter Alpha 2 and 3 were hugely popular for example. I don't know how the Marvel licensed games were competitively until Marvel 2, which was huge.
SNK games were massive in Japan, China and South America though, bigger than Capcom by a large margin in China and SA mostly because the machines were cheap as chips/easy to bootleg.