Did the breaking of the copy protection on the Dreamcast really play a big part in Sega's downfall? If so, it would be one of the only cases I know of where IP piracy led to financial ruin of the content creator.
The sales of the Xbox and Dreamcast never catched up to those of the N64 or the PS2. I would say the market was over saturated around that time with 4 stationary consoles.