It's their own fault: they basically did nothing for ~7 years. The chip set barely changed from 1985 until 1992 with AGA. ECS barely added anything, and AGA was too little, too late. The huge lead the Amiga had in the mid 80's was gone by the early 90's.
Commodore didn't exactly help matters, but the M68k platform was also a dead-end by the mid-90s. Which is why the Atari ST line also died around the same time.
Meanwhile you started to have machines based on RISC architectures (or high-performance x86, of course) for which custom hardware chips as found in the Amiga were just not as relevant.
Trouble is, most Amiga "apps" were games running on bare metal hardware with tight timing constraints, so emulation was not really a feasible solution. A similar situation to modern consoles, for which backwards compatibility often involves keeping the original hardware even on subsequent systems.
Yes, I'm not blaming the engineers. The company was dysfunctional. The Amiga was still an amazing platform from 1985 to around 1992, when you could get cheap 386 boxes with SVGA and Soundblaster cards. After that point, there was really no way back.
