I agree, 100%. I never owned one but I had a friend that had one and we would play it whenever we had sleepovers at either of our homes on the weekends. I honestly think it failed because of the same reason that the Sega Master System and TurboGrafx-16 failed - general lack of support from game developers.
I am sure it was a catch 22 though, fans won't support a platform with few games and developers won't support a system that is not selling like hot cakes in a lumberjack camp on a cold morning.
I have wondered what could have been had Atari been able to swing enough support at the Lynx to get over that first hump and gain more support from fans and developers alike.