It was the pragmatic choice at the time: the screen was reflective and featured four colors (really, shades of grey), but that was enough to allow the system to run for several hours on four AA batteries. It's closest competition, the Game Gear, featured a backlit color LCD, but it ran through its six AA batteries in an hour or two at most. There were other also-ran handhelds in that era (Wonderswan, Neo Geo Pocket), but the Game Boy was by far the most dominant system of that era. Nintendo didn't face any substantial competition until 2004/2005 with the PlayStation Portable, and even Sony didn't do all that well with its two portable units (the PSP sold okay but game sales dropped off once the system was hacked, the Vita was a dismal failure in both hardware and game sales).
The Atari Lynx was the other one that came to mind. I agree with you, the original Gameboy was well-designed. I had one of course being over 40. It was the Nokia brick phone of handhelds. Yes, I was envious of the Game Gear, but most of the attention was on the Gameboy anyway so you could safely ignore its existence at the time. Portable anything back then was still quite the novelty. And the games on the Gameboy were fun. Tough to beat a game of Super Mario Land or Tetris.
