I think Win2K had higher memory requirements, which meant a more expensive machine for the same performance. (This was always an issue for WinNT and OS/2 versus the DOS/Win9x line)
I think software compat was also lacking. DOS games were still in people's libraries (eg Quake from June '96), and I remember needing an extra 4MB to run those inside Win9x versus booting to DOS mode. That stuff didn't Just Work (tm) on Win2K. For example, http://sandmann.dotster.com/djgpp/DJGPP_W2K.htm is a list of issues with the most popular GCC port to DOS. (The Quake DOS binary was actually built with an earlier version of that compiler)
I remember the WinXP DOS emulation was supposed to be much improved over Win2K, but don't recall specifics.
I think software compat was also lacking. DOS games were still in people's libraries (eg Quake from June '96), and I remember needing an extra 4MB to run those inside Win9x versus booting to DOS mode. That stuff didn't Just Work (tm) on Win2K. For example, http://sandmann.dotster.com/djgpp/DJGPP_W2K.htm is a list of issues with the most popular GCC port to DOS. (The Quake DOS binary was actually built with an earlier version of that compiler)
I remember the WinXP DOS emulation was supposed to be much improved over Win2K, but don't recall specifics.