Another factor in CBM's/Amiga's demise which is easy to forget is market penetration. Part of the reason for the Amiga's demise was the A500's failure to establish itself as a C64 replacement in the U.S.
As Twistin' will no doubt confirm, CBM's pathetic marketing & support of developers stateside ensured the Amiga's fate there. Whilst it did feature heavily in serious app's like Deluxe Paint, & Desktop Video, the low-end failure of it being a home computer meant people replaced their C64's/Atari's etc. with PC's, if they wanted to play games they went Sega/Nintendo.
Shrinking worldwide markets, shrinking revenue.
General penny-pinching by CBM upper management starved Amiga R&D. Rather than the belated AGA release, had CBM not invested heavily in the PC market & instead concentrated its R&D on the AAA chipset Amiga's, it might've been able to retake the technology initiative & impact that the original Amiga had on its release.
@Unknown_K. CBM did have the option of including a high density drive, however costs were involved in order to sell at its pricepoint on release. Either the A1200 would've had 1meg RAM with high density drive, or 2meg ram with low-density drive. The CBM UK managing director Kelly Sumner confirmed this in an interview in The One magazine.
Realistically, in order to have survived The Amiga & Aplle technologies would've had to have merged or the Amiga to have taken over the Mac's market. And with the idiotic clowns headed by Gould & co. neither was ever going to happen!
Any longtime commodore fan would recall the pre-gates days, we'd endlessly complain about commodore's marketing & R & D!