Have you guys read Game Over? Recently?
The reason Nintendo pulled out of that deal is because Sony would have had most of the control over the Super CD. Thus, had it gone through, it's very likely we would see Nintendo as a subordinate of Sony corporation today, or a partnership between the two in all things videogames.
Of course, Yamauchi was much too proud to let that happen (sheesh, it sounds like he's dead), which was why the deal didn't have a chance of getting through in the first place, once Sony revealed it's terms.