I guess it really depends on how you take the game.
First, the game plays like shit. Without using more memory, not messing with GFX or anything, you could have the special move working like in the arcade, combos working like in the arcade and the enemies not ganging you up in a corner until all your energy goes away. Those 3 fixes would already make the game a shitload better and it would still run on 512 kb.
But I personally would prefer smaller sprites (BOBs whatever) with better speed/gameplay. Give me smaller sprites but all moves and all enemies. The way the game streams from the disk mid-gameplay, I believe it could fit on 512 kb. (Golden Axe and Shadow Warriors do, don't they?).
Of course, you would need someone to rework graphics, and AFAIK Mr. Applin was doing the whole job alone (for both Amiga and ST in just 6 months which, we have to admit it was an impossible job).
Now if you are talking just about the genre... I really think a scrolling figthing game designed properly for our machine could be very good. Unfortunately no one ever made one that was good. Last Action Hero could had been good with a few (a lot?) of tweaks. Golden Axe is the best game on the genre for the system IMO, and I don't think even as an arcade game it was all that great.
Someday I'll try to code one myself. I really have many ideas of how to do it, I just need the time to sit down and write the code for it
