The high price factor was due to the 3DO's curious manufacturing scheme. The 3DO technology (custom sound and video hardware) was licensed to equipment manufacturers who were responsible for producing and marketing the units. While the US$800 first generation unit was the most egregious example of attempting to recoup the licensing cost via a huge retail markup, less expensive and more successful models were produced later by both Panasonic and Goldstar. There was even a "3DO Blaster" card made by Creative Labs for home PCss.
The 3DO software library really did exhibit some of the worst aspects of home video games. This was the dawn of CD-ROM gaming, so cutscenes of pixelated video footage dominated many titles at the expense of good gameplay. The best titles were usually ports of games from other systems--including Myst, Out of This World, and Star Control II.