NEC made so many stupid mistakes with the TurboGrafx-16. One controller port, requiring fans buy an adapter to play two, or more, player games.
The stereo add-on, that also acted like a battery backed save game accessory, being an additional purchase.
The self censoring of Splatterhouse. Not just the color of the mask but also some scenery elements were removed. Why? They were the underdog, run with the controversy, run with the playground word of mouth - who was going to stop them?
As you mentioned, the two buttons on the controller. At least they offered auto fire.
Delaying the console nearly a year in the US as they argued over what case to put it in, then having to run that by the US government for approval - just change the color, or not, of the PC Engine and run with it. Imagine had NEC been out nearly a year before Genesis rather than less than two weeks different.
Just one bonehead move after another. It didn't even help that they let Hudson basically buy out the US operation and form TTI either. Just more bumbling messes there (Bonk 3 on CD and HuCard? Why just that one game, why not others?).
I loved the TG-16, or at least the idea of it back in the day. I had a very limited collection of games but I played them a lot. They felt different than NES/SNES/Genesis games somehow.