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They created their own graphics and audio chips because at that time off-the-shelf parts did not exist for what they wanted to achieve. But by the early 90s it was no longer feasible for Commodore to compete with specialized chip manufacturers. By the late 90s it would have been outright impossible.
Had Commodore survived, the technological path would definitely have resembled that of Apple's, with increasingly standard hardware components. It's not that Commodore particularly couldn't keep up with custom parts; no one else could either as we can see from the results today.
The operating system and all the software that ran on it was definitely a big part of the Amiga experience. Not everyone just played games or watched demos.
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