Had the SNES CD-ROM been released, The Secret of Mana would have been one of the launch titles
One of my favorite games of all time but I wonder if it had the mass appeal back then. I don't think it was readily recognizable at the time. Who knows. There are other stories of companies accidentally creating a competitor that nearly squashed them. I want to say that Nintendo offered to sell out to Atari (this might not be true) but Atari was so arrogant by their market dominance at the time that they turned down the offer. Kind of like the mistake that Yahoo made when they passed on acquiring google for some crazy low price like $25 million.
I don't know if you ever actually played and Sega CD games, but for the most part they absolutely sucked.
I think for the launch they would have wanted a launch title from as many major genres as possible. Arcade, sports, role playing, etc. Secret of Mana was well enough known among those that like that sort of game and it was the number 2 selling game behind Mortal Kombat in October 1993 in North America (according to Wikipedia). It was also huge in Japan with the initial shipment selling out. I think it was big enough to have been a system seller and it was definitely the sort of game that could have benefited by being on CD (much was cut from it for the cartridge release supposedly).
Yes, as i recall Nintendo offered the NES to Atari to market in the U.S. as an Atari system. However, Atari strung them along and released the Atari 7800 instead. That decision itself would not have necessarily been bad if Atari was not so stupid in their game development strategy (develop games as cheaply as possible without regards to quality). Remember, just a couple years before the NES, Atari WAS the Google of gaming. An even bigger issue was that Nintendo outsmarted Atari with the way they handled third party licensees. They were very strict locking in such developers to be exclusive to Nintendo. Arguably this was anti-competitive and illegal but it worked. So yeah, in retrospect turning down Nintendo was incredibly stupid. But had Atari been smarter in developing, marketing and attracting 3rd party developers it might not have been an issue. There was nothing really wrong with the Atari 7800 hardware. It's just that the vast majority of the software (what little there was) sucked.
Yep, Sega CD games pretty much sucked too, at least most of them. But it's because they seemed to focus on the wrong things. Crappy FMV, shovelware, and games that could have been done just as easily on cartridge. On the other hand, the CD format was excellent for creating huge RPG environments (with cuts-scenes and a cd quality soundtrack), standard sorts of side-scrolling adventure games with many more levels, etc. It's just that too few games released actually did this. It wasn't because of any technical limitations with their CD add-on though.