Nintendo

Nintendo wasn't going to be left behind and released the 16-bit Super Nintendo two years after the Genesis. It was a long two years, the Genesis had gathered a ton of momentum and many wondered if Nintendo could catch-up. Nintendo almost certainly considered whether to make the Super Nintendo backwards compatible.

By this time the NES established a game catalog larger than anyone else ever had, could they really leave it all behind? The Super Nintendo CPU itself was backwards compatible the original NES CPU but the video chips were not. This is something that the hardware wizards at Nintendo could have worked out but they decided against it.

If hardware compatibility wasn't an obstacle then what was Nintendo's motivation? Their concern was likely that if the NES was alive then publishers would still release games for it rather than shift to the Super Nintendo. Famicom versions of Final Fantasy II and III were sitting in Japan just jonesing to be translated. Had the Super Nintendo been backwards compatible it's possible, perhaps likely, we would have seen these two games in the states.

The Super Nintendo could have been in the unenviable position of having to compete not only against the Genesis but against it's little brother as well.