Still better off than SEGA ended up relying so heavily on third party support
Why is it that easily the best console of all time came out 26 years ago
The Sega Genesis sound chip could do wonders in the right hands
I didn't say using dedicated hardware was a bad thing. I said the Genesis had a far superior CPU that in the end made it able to do some of those dedicated effects in software which leveled the playing field and made some of those hardware effects not as big of a deal. In some ways it can actually do certain mode 7 effects better.
For example the Scaling Bowser in Super Mario world is on a solid black background, because Bowser is the background layer there, not a sprite. The Genesis can actually do sprite scaling with CPU brute force without sacrificing background objects.
It's CPU is powerful enough to give the Super FX chips a run for their money. Having the extra chips in the cartridge isn't something specific to Nintendo hardware. The Genesis can do it as can the Master System, NES, PC-Engine, etc. But due to the Genesis already having a leg up on the SNES in CPU power, when an actual add-on chip is used on the Genesis, such as with Virtua Racing, it blows the SNES out of the water in terms of performance.
As for colors, that is one of the true areas the SNES is superior. But the worse part of it isn't the master palette of 512 colors. Remember the PC-Engine used that same master palette but it could have 512 onscreen colors due to it having 32 sub-palettes in CRAM for onscreen colors. The SNES only has 16 resulting in 256 max colors. In many cases the PC-Engine looks just as colorful as the SNES with only 512 colors in it's master palette.
That said, the Genesis has quite a few tricks up it's sleeve to increase the colors beyond flickering and dithering. You can exploit Vertical Interrupts to do a mid-frame palette swap to change colors. The Sonic Games do this in their water levels. Another is the use of Shadow and Highlight mode, These modes will brighten or darken colors without costing additional sub-palette entries. It can be used to display colors that are technically not in the 512 color master palette. If you exploit both of those you can in theory get 1500 unique on screen colors.