No, I actually think the machine was for the most part limited in the way it was for good sound reasons. The RDRAM must've been pretty dang expensive for the time. 4Mb was the limit if you actually wanted to sell the console.
Nintendo saved a lot by not having a drive in the machine, and was therefore able to put a little extra silicon in it.
But I think the 64DD was a really great idea and it should have been available from the very start, to let people know they had the option if they wanted to. It's not as if it was groundbreaking tech back then. The ZIP drive launched in 94 with similar tech in a 100Mb format.
It would have been pretty trivial to release all games on disc too. Later when price fell they would have combined the two into one standard console. If the modem had been included, as it was in the initial release, they could have been the first to offer downloadable games too.
The only thing that really needed fixing was the texture buffer.
That and the analog stick should probably also have been of a sturdier design, with a better joint.
Just about the best analog I ever tried when it was new, but it deteriorated over time and got more and more play to the point where it was just flopping around on some demopods.
I fixed it on mine though by lubing it with silicone and using two fingers on the side of the disc, instead a single tumb on the top, so the joint wasn't subjected to downward pressure.