The thing that really killed the Dreamcast was the lack of DVD. However, Sony had no intention of letting SEGA have the first DVD console on the market (Dreamcast came out a year before the PS2 in most markets).
I disagree with you saying the thing that really killed the Dreamcast was the lack of DVD. Sega had money problems because of the mistakes they made.
Sega had a very bad reputation of abandoning their game system a short time after get releases. That meant consumers didn't have a lot of trust with Sega besides not having some 3rd party companies.
I went to a shopko in 2000 and I heard a store employee telling a consumer not to buy a Dreamcast because Sega would be abandoning it 2 years after it gets released matter of fact.
Here is the proof:
Sega CD was released in Nov. 1992 in North America and was discontinued in late 1995.
32x was released in November 1994 in North America, but was discontinued in late 1995 with the final game being in early 1996.
Sega Saturn was released in North America in May of 1995, but Sega of America announced the Saturn was being discontinued at 1997 E3 for the Dreamcast.
Sega Nomad was released Nov. 1995 and discontinued in 1997.
Those things shaken consumers confidence in Sega as a game console maker. While the Sega Genesis was a very good seller, what Sega did starting with the Sega CD caused people to lose faith in Sega. Sega made a series of bad decisions including releasing the Sega Saturn in May 1995 in North American instead of September 1995. Sega releasing the Saturn Early was something retailers in North American didn't expect at the time and 3rd party developers wasn't happy with Sega doing that either.
When the Sega Dreamcast was released in 1999 for North American I didn't buy one. I didn't because I didn't trust as a game console company due to their history of discontinuing systems for 2 or 3 years after they were release on the market. Game systems are supposed to stay on the market for 4 to 5 years at least.