There was also the issue of "viral pricing". As the application was grown as a extension of the image, people were supposed in some schemes to not only pay for their own copy, but also for every copy of the software they wrote and shipped to customers, as it piggybacked on the original image. While free software thrived on copyleft, the first Smalltalks withered on "payleft".
This is not true. Even the Smalltalk-80 Blue Book wasn't released until 1983.
> If you can't build adoption with a 15+ year head start
Historical context is important here. FOSS etc were not nearly as prevalent as they are now, and most major development environments had a price. The main Smalltalk players probably got it wrong by pricing out expensive licensing fees. But the head start does not matter when the next thing that comes along is released for free, which is what happened with Java.