Price point, perhaps? The Amiga only became a big success for bedroom coders once the Amiga 500 was released, after all.
If you were a serious user of a 64, there was no forward upgrade that didn't consist of chucking all your software and data. Yeah, you could get a 128, but that was frankly close to obsolete the day it launched. If you have to abandon your existing investment, the bargain-priced Atari ST and the collapsing price of PC clones made them reasonable shortlist competitors against the A500.
It would have been interesting to say "here's a $100 module that lets you connect your 1541 and read the discs, and run your 64 software in a window."