Being a TurboGrafx/PCEngine fanboy (and understanding that I've not had time to watch the video yet), I do have to comment on this one.
It was definitely a cost-cutting measure to forego a Player 2 port and stereo inputs. Looking back, however, no one EXCEPT for Nintendo with the NES put stereo A/V outputs directly on the console. Sega didn't do it with any of the Master System models, nor with their Genesis models. Nintendo also didn't do it with the SNES - though to be fair, if you purchased the A/V cords for it rather than using the default coaxial video, you could get it right out of the console. And A/V cords were much more cheaply available than either a CD-ROM attachment (which provided A/V), or a Turbo Booster, which was cheaper than the CD-ROM attachment (obviously) and if you purchased the Plus option, even provided save game capabilities.
I tend to think of it this way: NEC was cutting edge with their ideas, though some of the business decisions were crap (releasing some of their better games as Japanese-only exclusives, lack of a P2 port, lack of easily-accessible stereo a/v) and their near total lack of marketing was completely crap (especially when you consider that the marketing that they did do was actually rather good)... but here's the thing.
The TG16/PCE came out before the SNES. NEC's plan was to market a LINE of consoles to appeal to all levels of gamers, including handheld gamers. Kiddies and less-hardcore gamers could opt for the low-end Turbo Grafx 16 model, and they could grow that console through attachments (something that Nintendo, et. al didn't do). More demanding gamers could go for more professional hardware: the Turbo Duo, which included a CD-ROM attachment and stereo A/V cords (of course the Duo came out in 1990, rather than 1989, but eh).
Note: I'm not going to discuss the Japanese market, as that's something that I largely don't understand, and I don't think that American gamers of the time were even aware of the total plethora of strange PCEngine consoles that NEC made, though we of the Internet Age certainly are.
NEC beat both Nintendo and Sega to the market with a 16-bit console. Despite claims by competitors, the NEC systems were 16-bit, but they did feature an 8-bit CPU as well (since they had a dual CPU architecture to split graphic/cpu and sound duties).
NEC was the first home console to allow for CD-ROM support - and yes, of course this was at an expense, and a premium above the total cost of competing consoles.
NEC was the first home console to feature first-party hardware save game features (rather than relying on battery-backed NV-RAM in cartridges).
NEC was the first company to buy into the "smaller is better" mentality, and manufacture cartridges for a home system with low-profile, easily-to-store games.
NEC was the first company to feature a color handheld, and - wait for it! - for the first time, you could purchase the handheld and NOT have to repurchase all of your games in inferior handheld versions!
They had their problems, particularly with marketing and the aforementioned lack of a P2 port, but they were far ahead of their time in the overall vision for their console line, and unlike the NES/SNES/Genny, people are still discovering vintage games on this system for the first time, and people are still being blown away by them. Though to be fair, this can be attributed as much to the relative obscurity of the system (damn marketing!) than the depth and breadth of the games.
And yes, I've all the various hardware now... and I was one of the lucky ones that got to play with this system growing up - my cousin had one (he had everything, literally) - and Legendary Axe quickly became one of my favorite games of all time, with what I consider to be one of the best soundtracks of all time.
Non-fanboy glasses: some of the games released in the Western market were for shit. They were too Japanese... too far out there to be a success in the Americas. And the console suffered from the bias and arrogance of the Japanese developers, as several of their best games were simply not released in the US/EU because they were considered to be too difficult, etc (some of their shooters come to mind).
The system has a surprising amount of good platform/puzzle games, but where it really shines is in its shooters. If you like those, get this system and start hunting them down. And don't forget to pick up Neutopia while you're at it - it's a pretty decent RPG in the Zelda vein, easy enough for kids, but not so kiddified that adults can't enjoy it.
Food for thought: of the first 94 games released for the SNES, how many could be considered good games that stand the test of time? The US SNES collection spans over 700 games, IIRC. The TG16 had only 94 hucard games released, total (I'm not counting CD games since hardly anyone would've been able to afford one back then). Of those, there's a number that stand the test of time (several of which are original games that are console exclusives). I wonder if, percentage-wise, the TG16 holds its own against the eventual king of the 90's console wars, the SNES? - I've never actually researched this avenue before, but it's an interesting question.