I believe what makes a console "bad" is likely a combination of several things. I'll touch on them each in their own regards.
Developer Support:
I still hear people talk about how horrible the Dreamcast was due to the fact there were no EA games and they had no support from the company. While Sega fixed this impressively by creating the 2K series, I don't believe it's their downfall. But I'm seeing this now with the Playstation Vita. It's by no means a horrible console, but because many developers are holding off from putting games on the system, it's not exactly helping it at all. This would be a strong case for the 32X. There weren't a lot of developers putting games onto the system because they were afraid they wouldn't make any cash on it, and rightly so from a business stand point.
Lesser Known IPs:
People all know the Call of Duties, the Halos, Marios and Zeldas. They're the big names that pull a lot of people in. Some people pass over games they've never heard of and don't take risks buying lesser known games such as Yakuza, Shenmue, Skies of Arcadia. It isn't until years later of hearing people clamor over these games that people look back and realize they missed out on these games. By then it's too late, the sales are missed, and money wasn't truly made on those games, thus cutting into the life of the system. Not that lesser known IPs are a bad thing at all, but it's the truth that many people will pass up on these games. I remember talking to a used game seller about how some older games are so expensive now, like Mars Matrix (A game I'm still trying to hunt down) and he recalled that when the game was released, no one wanted it and he couldn't get rid of the game and remembers marking it down to even $15 new when the Dreamcast was discontinued, and now the game goes for around $80. The game simply sold poorly back then. This sort of thing though continues on even modern consoles.
Not Knowing What the System Is or Who it's For:
I hate this about modern consoles... They're now more than just for games. They control your TV, are DVRs, play movies, stream, have a bunch of applications, can make video calls.. Consoles in the '90's were simple. They played games, and that it. Some catered to kids, some catered to adults. Nintendo struggled with the GameCube to define who their target audience was and for awhile, the system had troubles finding itself and who it was meant for. The PS3, when it was released, was the cheapest BluRay player on the market at the beginning, and I know a lot of people who simply bought the system for that and never used it to play games. Not to mention you had companies like Best Buy giving the console away for free if you bought at shiny new LCD TV. Now it seems like with the new consoles, gaming is more like a 2nd thought than the first thing it really does. Who do you target that to then?
Uneducated People and Bad Marketing:
This sorta would tie into an Add-on topic. People didn't know exactly what the 32X did for the Genesis, and often passed on it because of that. Just as how the Xbox 360 got the HD-DVD Add-on. The 360 had no BluRay support, the PS3 did, so they went with HD-DVD. It "failed" because...again, no support from other companies. Even though HD-DVD, in some sense (and I'm not going to argue about this..) it had better picture quality than BluRay. Sure, it had its faults as well, but BluRay was more widespread and people were more aware of it, because it was marketed more. Marketing, Marketing, Marketing. Don't know how much I can stress that.. Sega hardly markets their products anymore. They rushed the Saturn out to try and beat out Playstation. Nintendo did the same with some of their systems. They tried to gain back market share, push it out there, but then had nothing to support it. The Vita is going down because Sony's hardly talking about it. Developers aren't talking about it. Gamers aren't talking about it. Why invest in a machine that's got a certain price tag and no one can justify investing in it when they hardly understand it or know why they should have one?
Poor Build Quality:
if it breaks after awhile and does last, or has some serious design flaws (Red Ring of Death, anyone?) or just burns out, that would justify it being a truly horrible system. If it lasts for 10+ years without a hiccup, then it's a perfectly good investment. Nothing lasts forever, that's for sure, but you'd expect a product to last more than a few months, or even weeks, and it just gives up on you.
Most of these things can be fixed (and some have for certain products..) with updated released, or better quality control.
So, yeah.. I feel like I'm rambling now and I don't want my topics to fall off point... So, I'll stop myself there and let others chime in.
