I don't think the launch titles were bad (better than the Genesis launch titles overall) though it would have been nice if they could have gotten a big name arcade franchise or something developed for release. Something very recognizable as a system seller.
I think if they had gotten Street Fighter II and Castlevania out that it could have made enough of a difference to extend the life of the system. But like you said, by that point I think TTI had already made its decision.
I disagree about the popularity of role-playing games at that time. The NES had tons of popular RPGs including Final Fantasy, the Dragon Warrior games, some ports from the computer world such as Dungeons and Dragons, Bard's Tale, Wizardry, Might and Magic and Ultima. Then there was Faxandu, Crystalis, 8 Eyes, Magic of Scheherazad, Ys and lots of others. I think they should have localized and brought over Far East of Eden. That game had the same kind of popularity as Final Fantasy and Dragon Warrior in Japan.
I think there are a number of games on the PC-Engine game list that would have made for solid releases in the U.S. though they likely would not have been huge blockbusters I would think they would do better than games like J.J. & Jeff. The Fire Pro Wrestling series, a couple of other RPGs, a number of shooters, etc.
Just at a glance through the PC Engine release list (and i only made it about 20% through before I got tired of looking), here are some games I think they could have released in the U.S. without licensing issues (from nintendo anyway);
Mr. Heli/Battle Chopper
Heavy Unit
Volfied
Atomic Robo-Kid
Space Invaders: Fukkatsu no Hi
Golden Axe
Super Darius
Where in the World is Carmen Sandiego?
More of the Cosmic Fantasy games
Power Drift
Daisenryaku
Xevious: Fardraut Saga
Rastan Saga 2
Last Armageddon
Die Hard