Did HD-DVD lose against BD only because of capacity?

HD-DVD’s main advantage over BluRay is described in the following picture:

Fragile and exposed data layer, just like CD. Just on the other side.

HD-DVD is also cheaper to produce, even for same capacity.
BD however has higher capacities per disc, more accuracy and higher reading speeds.
Additionally, there is a BD-XL standard since 2010 with more than twice the data storage per layer and up to 5 layers.
But DVD+R and DVD-R also share the same market.

HD-DVD was marketed in improper approach. Like DVD-RAM.

HDDVD has a HD-DVD-RAM and even HD-DVD-RAM-DL variant, whlist there is no BD-RAM. However, BD-RE-TL supports random writing, it can however not match DVD-RAM yet. Additionally, (HD-)DVD-RAM(-DL) has much more than 1000 writing cycles per disc usually.

My question is:

Did HD-DVD fail in the format wars just because of smaller capacity?

Capacity seems like the only thing that matters to an average costumer. Wasn’t that how VHS beat BetaMax?