Staying Current - During the 2600 era, it seemed that a lot of current hits made the system. But with the 5200, they simply rehashed 2600 games. From then on, Atari always seemed to be a couple years behind as far as getting current arcade games or getting the games gamers wanted (like platformers during the NES era). Even the Jag seemed to get NBA Jam TE far after other systems got it and the MK3 talks didn't seem to happen until after others systems got it as well.
Having Good Pack-In's - Combat was genius at the time, because it had lots of variations, but required a second player. This meant a lot of neighbors got exposed to the 2600. (This was most likely the only time this would work). But Super Beakout seemed outdated in the 5200 as did Pole Position 2. And I know it's a good game that gets a lot of love hear, but California Games on the Lynx was based on a title that already appeared on many other systems. And Cybermorph wasn't able to outshine Star Fox in most players eyes.
Being Innovative - Atari was trying everything when it first started from systems to robots to the Cosmos to the mind link and more. But after Warner bought it and later sold it, innovation died. Yeah, the Lynx was cool, but Epyx made it, not Atari. They did try to do the VR thing, but odds are it would have been a better idea to make the Jag disc based to start with. Also, they never really made a new, great game franchise after the 2600 days.