I don’t think any consoles had decent anti piracy back then. Dreamcast had some, but got beaten. They were routinely being chipped for piracy up to the Xbox 360 era. I remember that well because people at work laughed at me for buying games, and then MS banned them all on one day and they had to buy new ones to be able to carry on playing online.
It was killed by the PS2. That thing was a juggernaut, and Sega just couldn’t compete. Xbox and Gamecube hadn’t even launched before Sega threw the towel in. They just couldn’t get any traction and got out of the console market before they went bankrupt, selling at ever more unsustainable losses.
They’re still around, so it was probably the right decision in hindsight.