Making cool stuff and being progressive actually kept them alive longer.
When x86's starting eating away the profits of their SPARC business, it was abundantly clear they would have problems down the road. Computing platforms tend to move up and what's on your desktop now may be powering servers ten years from now (quite possibly because by then people will have spent ten years writing and learning how to write software for it).
Sun tried to disrupt the desktop with the SunRay series, but they never got to the right price point. I'd have loved to have a Niagara-based desktop and I bet that had one been available for Unix enthusiasts, Firefox would be rendering pages and tabs on dozens of different threads.
People often discount that, but I can say it from experience. Back in 1998, I had two machines on my desk at work: a 400 MHz Pentium II (or III) and a dual-processor 200 MHz Pentium (both running Windows NT 4). While the single processor was somewhat faster, the overall experience of the dual processor machine was much smoother, with very few pauses and hourglasses. A lot of software today is single-threaded for the sole reason processors have only recently become multi-threaded.
And x86's only became multi-core/thread after the NT kernel became mainstream.