Well piracy could have been to blame, but then again, myself I'd blame the fact that the games were simple re-hashes of (at that point) 7 year old franchises that had been using the EXACT same spirtes and gameplay mechanics since the original titles' release. The fact that the games were pirated so easily really had to do with the fact that at that point the neogeo was about 15 years old and it's hardware was already wide-open to hackers and emu authors. Emu devs were actually incredibly respectful to snk by banning these games from their emulators, even though they were practically supported already. The problem is, as I said, the neogeo was wide open at that point, so open that non devs could easily hack-up the source code of mame or something similar to support the titles. So in other words, snk playmore was too cheap to develop a new hardware platform and too lazy to make completely new sequels so they got what was coming to them. Keep in mind, this is coming from a snk fan.
There isn't anything particularly more secure about the atomiswave (I'm sure they tried to make it more secure, but NOTHING is un-hackable), it's just, as I said, emu devs are actually quite respectful of the arcade industry and nobody is going to try to emulate an arcade system that only plays brand new games as the only reason to do so would be for piracy. Only within the last year or so has naomi hardware seriously been looked at, even though the system has been virtually dead for some time now. The reason is the same.
The atomiswave will eventually be emulated, it's just too new atm.