Oyeve,
American consumers like free competition and (for the most part) don't care what quality they have to sacrifice to obtain a low price. Yes, VHS sucked, but most consumers could not tell the difference. I did not even own a VCR until 1987 when I could get one for under $200. I was in college and thats all I could afford. By that time, Sony thought Betamax could survive on the high-end of the market and had priced themselves out of competition. End of story.
Most ZIP drive buffs migrated into that technology from tape drives - thus it was a big improvement. MD's were not even widely available in the US (for audio) until a couple of years ago (nothing like in the Far East). I have never seen a data-MD product available in the US - and if they are, Sony has not marketed them sufficiently. CDR's are now dirt cheap, Sony has carved themselves another niche with MD. End of story.
I am not disagreeing with you about the functional benefits of MD technology (for data and music). I almost bought one a few years ago (for $500); then I saw a CDRW drive for $300. I didn't have a MD player in my car, I had no choice but to go CDR.
(M)