PS2 also being a DVD player sealed the deal. For a while there it was one of the cheaper options for a DVD player, and if you bought a PS2 to play DVDs, might as well buy some games too.
Someone took a hard look at the numbers and determined that even with piracy there was no uptick in units sold which means people were just not interested in the Dreamcasts unfortunately and it was piracy that killed it.
But then again people who knows Segas history wouldn't draw this conclusion anyway. The Dreamcasts didn't have a chance with Segas past and Sony Playstation 2 hype and money