You aren't wrong.
There are some caveats, of course. ATM saying Xbox Series is equivalent to Dreamcast is insulting to Dreamcast from a software creativity POV; SEGA were really firing off all cylinders with 1P creative juices during Dreamcast, even if they took longer to get to some IP than they should've (VF4 and PD Orta should've been Dreamcast games, for example). In comparison, MS have had a lot of mid-level 1P content this gen between Halo Infinite (yeah yeah, great gunplay but who cares? Not many going by sales and player counts), Forza Motorsport (a complete trainwreck), Hellblade 2 (somehow worst than & regressed vs its predecessor), Starfield (didn't live up to even the more reasonable hype), RedFall (lol), Bleeding Edge (loooool), and games like Everwild still MIA (and likely dead).
Also, there's the fact Xbox has that Microsoft cushion to fall back on. IMO if it weren't for Microsoft owning them, they wouldn't have been able to buy either ABK or even Zenimax. Xbox also benefited from a pandemic early this gen; Dreamcast had no such "luck". So if it weren't for those two things, Xbox Series would've ceased production by late 2021/early 2022, and Xbox as a hardware platform would've either shut down or been sold to some dental company.
Saying that Xtreme eventually had its own engine doesn't do anything to refute anything I said.
Sonic Adventure was certainly impossible on that generation but it doesn't mean any 3D Sonic wasn't. It probably would have had a smaller emphasis on speed than Adventure, like Sonic 1.
What I'm trying to say is that it's frivolously hand washing of Sega's failure to produce a Sonic for this generation to say it simply couldn't be done. Same brand of shameless excuses made for Xbox.
The 3D areas of Sonic Jam prove that 3D Sonic could've been done and, even if slower than the 2D versions, would've been perfectly acceptable by gamers at the time. 3D Mario wasn't as fast as SMB3 for example (once you're talking peak speed), but was more than fine. Even if Sonic sold itself on speed more than Mario, everyone back then knew speed was just part of the appeal with the 2D games.
There being no 3D Sonic (or even a 2.5D Sonic ala Clockwork Knight) on Saturn is 100% down to SEGA's incompetence that gen, mainly because SOJ and SOA were at each other's throats. Anyone saying otherwise is just looking to pass along the blame. But with X-Treme, at least Yuji Naka can kind of be blamed since he told the X-Treme team to stop using his engine or else he'd leave SEGA. They got set back so far with no delay for the game, and IIRC at least two of them ended up in a coma. That's how bad the crunch got for X-Treme before it was cancelled.