It comes down to the game to a degree I guess. It is indeed possible to create a good game soley with the 1 meg chipram, but for a bigger more elaborate game it gets harder and harder to squeeze good results. Code itself eats in to available chipram, which is quite valuable when your storage medium isnt "instant". More and more tricks are needed to squeeze in required gfx data, like realtime decompression of data, which itself eats into resources. Given an extra 8/16/32megabit of ram (well rom really) data can be stored in ways that make less "tricks" required leaving the full potential of the hardware to be used. Not to mention that chipram is slower than ram dedicated to the cpu (hence the term "fast ram).
Had the a500 had its chipram plus a few meg (say 16megabit) fastram, even with everything else unchanged there would have been more potential to let the hardware shine.
Just a shame that potential was never really tapped as by the time a typical amiga was upgraded with extra ram commercial development had pretty much ceased.
Personaly I think its a shame that there's not real games that use the potential of an upgraded aga machine in an "amiga style" game, but even ocs/ecs system could have produced games with fewer comprimises had megabytes of storage space been instantly available (like in a cartridge for example).