There were a number of problems with the Saturn, the main ones being:
1. Price - it was released at around $399 (IIRC) and 6 months early. A bit too much for people to swallow.
2. Failure to anticipate the 3D era of gaming - Saturn was a 2D powerhouse with 3D capabilities tacked on at the end. Once Sega recognized that Sony was a legitimate threat, they scrambled to add 3D capabilities, but the result was a jumbled mess of hardware that was difficult to program for.
3. Lack of 3rd party support - Partly due to weak market penetration and partly due to hardware capabilities
4. Platform confusion - The 32X was released as an "interim 32-bit platform", but Sega seemed confused about which platform to support once the Saturn was released. Many 32X owners (including myself) were miffed that Sega dropped the platform after only 6 months.
The Dreamcast was a fine platform, but once again, Sega jumped the gun too soon. The platform beat PS2 to the market, but many consumers weren't ready to make the next generation leap yet. When that time came, the PS2 hype machine eclipsed the Dreamcast, which had slightly weaker hardware but a far superior library of games.