okay so im 3 sheets to the wind, but here goes
1) sega had then recently lost one of its biggest financial benefactors - this can't be overstated; they constantly took risks & put out tech way head of its time, eating losses. the genesis was literally about the only hardware (console wise) that turned a profit
2) preemptively killing the saturn did not help 3rd party relations. they needed some of those big names (konami, EA, the outside hope for square etc) to bring the heat on the DC, facing the unstoppable industry hype of the then-incoming PS2.
3) (forget if it was peter moore at this point?) the US DC release came a good while later, and there was a push from SOA to sell it at a loss at a competitive $200. it was brilliant, 9/9/99 was by all accounts a huge success! but that up front loss meant they were heavily relying on recouping costs/turning a profit via software. not too long down the road, the aforementioned gargantuan PS2 was gonna drop, and they needed to stay far away from that price point....but their custom GD-ROM was also cracked, and while not a death knell, piracy didn't help.
they had a huge weekend after their final price drop, but they just weren't turning a profit. eating $$ up front with sales and having sadly lower attach rates (especially for one of the finest libraries to date) meant that badly needed capital - necessary to pay back debts/bad decisions made on genesis peripherals, saturn costs/losses, the deal with 3DFX going through ,etc etc - wasn't coming. couple all that with the boneheaded move the gen prior to kill all remaining (however small) revenue streams: game gear, genesis, add-ons etc. the company literally had about a year with next to nothing on shelves to sell, just accruing more operating costs.
i don't think it's fair at all to say the DC killed them. it was their longshot bet & all their poor decisions killed them, the DC just stayed alive as long as it feasibly could - but looking back, without a really big hit (say, GTA III) it just wasn't gonna make it. sony had ease of development kits (well, the gen prior anyway) and literally everyone on board. sega couldn't even rope in mediocre-ass EA by then, and just a few gens prior, they had one of the strongest relationships a 3rd party had seen.