People seem to be forgetting that the CD32 sold very well, so in that respect it was a success and unlike consoles of today Commodore made money on every unit sold from day one, not two years into sales and developers didn't have to pay a stipend to Commodore for every game sold.
You can't look at it from the perspective of an Amiga 1200 or 4000 owner. That isn't who it was made for, you already had AGA games. It was made for non-Amiga owners or owners of older systems who wanted to play the better games without the higher price of a 1200 or 4000.
Could it have done better if it came out earlier? Of course, anything would. If Commodore was on track, the 1200 and 4000 class machines would have been out around the time of the 3000, instead of the 3000 which offered little additional for people who already owned Amigas at the time.
Problem was, Commodore couldn't make enough of them since they couldnt aford enough parts and suppliers weren't interested in loaning Commodore anymore money. Couple that to the fact that Commodore couldn't get many into the US, it 'failed' simply because they couldnt make anough nor could get enough to markets where it would have sold more. Other than that, it was a decent success.
They were even in use in a line of arcade machines and in Scala's rack mount box.