Why didn't the Atari ST succeed?

As an Amiga kid, the title of William Blair's What's so great about the Atari ST? gave me a chuckle: I expected to think "that's what everyone asked themselves in 1989!" But I come away struck by how odd it was that the Atari 520ST didn't do so well in the years before Commodore put out the competitive A500. The 520ST was half the price of the early Amigas, gave most of what they offered, and made 8-bits instantly look very old.

CreatIve Computing's October 1985 issue featured the 520ST in its cover story with the first review of this system in a major independent computer publication. Their reaction? Here are a few excerpts: "Without question, the most advanced, most powerful microcomputer your money can buy… designed to move the power of machines costing thousands of dollars into the range a middle class consumer can afford… fairly positioned to blow the Amiga right out of the water… The Atari ST delivers 75% of the splendor of the desktop interface at 25% of the price of a 512K MacIntosh."

The answer seems to be what also troubled Commodore and Apple: marketing challenges at companies still dependent on successful 8-bit machines and snarled up by internal competitions and constraints. It was being marketed as cheap while still being too expensive for most families, and by the time prices came down and 8-bits were played out, it was just the lowest-end option and 16 colors weren't cutting it. That European gamers went mad for the A500, I've read, was largely a result of Commodore's advertising managers in the UK and Europe getting off the leash rather than anything actually planned by the company.

Previously:
Atari acquires Intellivision, 45 years too late
Atari ST Book laptop among the rarest treasures of the 16-bit era
Insider's story about Atari