On the one hand, if you look only at the 1989 libraries, it's not even close. Because of its much greater success in Japan, the TG16 has a far better and deeper library than the Genesis, by a lot. The Genesis had a few great games in '89, most notably Golden Axe and Truxton, but the TG16 had far more -- R-Type, Legendary Axe, Blazing Lazers, etc. NEC made a great many major mistakes and managed to lose to Sega in '89-'90 despite having better games and initially more games, but looking just at the first year US game libraries, the TG16 wins easily.
And going into '90, with major titles like Ys Books I & II (for the expensive CD addon, yes) and Bonk's Adventure, the TG16 probably still had the better overall library. Sega was gaining fast thanks to their much greater success in the US market, and the support of third parties like EA also added a lot, but it was still competitive between the two of them for sure.
In '91 though it was all over, the TG16's library slowed down greatly in terms of new releases thanks to its failure in the market while the Genesis shot up massively with the release of Sonic. Still, even though when Sonic released the Genesis probably had more overall releases than the TG16, I think that there is no question, before Sonic the TG16 had the better library. And most people saying the Genesis probably have never played a TG16. Overall, the Genesis is a better console than the TG16, both are among my favorite systems but the Genesis is right near the top of the list. Things were different for the first few years though; the Genesis just got better with time, as the TG16/PCE faded.
Now, even had the TG16 done better here in its first few years, I do think it'd have probably fallen behind eventually -- after all, in Japan the PCE did best in the late '80s, fading once the Super Famicom finally released in 1990. It only edged out the Megadrive overall there because of how poorly that system did in Japan, but the Genesis was never going to do as badly here as it did there. After that NEC started to bet more heavily on CD games, but while it did well in Japan and had a very high attach rate for an addon, a majority of PCE owners didn't buy the more expensive CD systems. Meanwhile, here in the US, that generation didn't really get going until right as the PCE was at its peak. More success here, and a much less stupid NEC, would have led to a lot more games for the thing and for it to make it through the generation, but a fast start fading over time was, I think, inevitable. Sure, you might have gotten EA games, that rumored Mortal Kombat 1 for TG16 release, and more, but after the first few years, once NEC switched over to a CD focus, TG16 owners would have a choice -- buy that expensive CD addon or a Duo, or get a different console? I think that they would have lost a lot of their audience, and I think more people would have bought a SNES or Genesis than a Turbo CD or Duo; CD addons were expensive, and in the West the main attraction there that generation was in FMV games, something the Turbo CD couldn't do that well. It didn't help that NEC/Hudson also had no real answer to Sonic; Bonk's a great game, but it's a simpler and much less innovative title than Sonic. Sonic the Hedgehog changed the industry and Hudson never really had an answer to it.
So yeah, NEC/Hudson's best chance for success in the US would have been to release the TG16 at least a year earlier. That almost two-year gap between the Japanese and US releases was a major problem; they had to build up a user base before the other consoles released to be able to make it. Of course, NEC being more willing to get third party support in the US, doing better advertising, not choosing to mostly only try to sell the system in a few big cities and not the rest of the country, etc., all would have been required too. Because it was never going to go anywhere when most of us Americans had only ever seen the TG16 in magazines. I didn't live in Chicago or such so I didn't know anyone with a TG16, and mostly read Nintendo Power so I didn't see it in magazines either. It was a pretty obscure system at the time for most of us. Toys R US carried it nationwide, but around here they were the only one.
But anyway, even with how things went, at least the TG1 does have a pretty good game library for its first couple of years. Yes, many major titles never released in the US, but we got enough good games for the system still still have a great library at least through '90, and, in retrospect, a pretty good one overall.