I remember a snippet about Unix on the TT030 in UnixWorld from around then: "Up from toyland." They weren't going to be taken seriously.
Atari's last two years of engineering were excellent between the TT030 and the Falcon030 and the last versions of TOS after they hired Eric R Smith to fold his open source MiNT project into the official OS.
But at that point in time nothing could compete with x86 and the 68k architecture was end of life. Even Apple had a rough time of it (after switching to PowerPC) and barely held on for the next 10 years.
EDIT: I should also mention the Atari Transputer Workstation project around this time, which was a multiprocessor Transputer + some pieces from the Mega ST attached as a controlling terminal. Another attempt to get into the higher end research & workstation market. Didn't sell any really though.
A sensible Motorola would have made the price target of the low-end 88K the same unit price of a 68030.
The architect of it regularly posts to comp.arch.
Meanwhile, getting Linux to run on a R Pi is a major endeavor.
I don't know how light you can get a Unix with, I guess, X running on it today.
I don't really think downloading a disk image and copying it to a microSD qualifies as a major endeavor.
With a 25Mhz CPU and 16MB of RAM, every cycle and byte has to be accounted for.
But then a 16MB RISC Unix workstation wasn't really low-end
Sadly, it wasn't possible to make it boot directly to BSD - it always needed a pass through Windows CE
Atari, Commodore, Digital, Digital Research, were lacking the management talent.
They had the nicest gear, but the suits botched it primetime. That's why I drink.
Now, more to the point of the parent: Sun and SGI had the management talent. They had a good run. But that run ended anyway. At some point they run out of ideas to compete with "industry standard" hardware.
So, to come to the point of the parent: would a very successful Atari UNIX station, based on the 68030 made a difference?
NeXT used the 68k processors as well. And Apple. Even with the Mac's success the PowerPC eventually run out of steam against Intel. Would an additional load of many, many Ataris made a difference here?
What did ARM do differently than all of those mentioned above?
So now with that under the belt it can return to desktop.
There isn't much they could have done. The good-enough x86 PC steamroller would have crushed them anyway. When the cheap average PC you could buy had VGA and a Sound Blaster, these platforms quickly ran out of gas in the gaming space.
If, and that's a big if, both Commodore and Atari managed to get cheap Unix (or Coherent) workstations out, at prices similar to PCs (which were generally more expensive), they could, perhaps, carve themselves a second niche as cheap Unix workstations.
It was the PC clone market that killed them, more than management errors.