Well, the key issue here is that they released two systems at the same time. Saturn was flawed in that it was not compatible to the Mega Drive, and 32X was flawed as it was the 32X - just a technically inferior but extremely expansive add-on. At Xmas '94, a Genesis owner probably would have bought two Super Nintendos instead of one 32X.
They told us for years that cartrdiges are a thing of the past and CDs would be the future. Why would you want a 32X with no games instead of a SegaCD or Saturn ? I remember that at the time 32X came out, I was still trying to persuade my parents to buy a MegaCD which in Europe was released in autumn of '93. For some reason we also only got the MegaCD 2 ? ...I still can't believe it: They asked us to pay more than 600 bucks for something that didn't actually fit with our hardware.
... I am starting to think Sega's decline began with the MD2.

