I think that's what ultimately did in Fiero (and by extension Trans Am, and Pontiac). GM didn't want any legitimate rivals to the 'Vette then, which is why I suspect any Fiero reboot would never come from GM now.
The timing of the Fiero may have been just a few years early, but look at all the 2-seaters that came into play around the time Fiero was cancelled - Miata, MR2, Del Sol, etc.
I think, had the GM suits let Fiero become what its designers wanted it to be, it would have been very succesful, but no doubt, would have cut into Corvette sales.
Maybe they should do it as an electric vehicle.
Now that I think about it, I’m surprised we haven’t seen more market emphasis on sporty electric two seaters. It seems like the perfect format for electric. These are weekend cars rather than daily workhorses. Super long range isn’t really a requirement and inconveniences associated with charging are less of a big deal. And all that instant torque would equal fun to drive which is really what matters in that category.