You make a very good point about the expanding market and the Amiga stood still in the end which aided greatly in its downfall....I can remember letters in magazines SCREAMING for cd support. Commodore didnt want to know for some reason? ( Truth is they couldnt get the gateways working properly and gave up ) They made a prototype and denied the future of games was in any way cd related.
The CD32 was an easier way out of the problem but mostly only existing games were ported across there were very few new games released so that killed that one off pretty quickly.
Its a shame as the PC at the time was a pretty poor games machine but it was cheaper and expandable.
Commodore got to cockey for its own good. They got to comfortable in their success and forgot about what the gamers wanted and the whole point to what they were in the market for.
Once Doom or 3D sims arrived along with SVGA on the PC it was all over for the Amiga as it stood at the time
Or you could say there were no games left to copy