Betamax produced higher quality video, that was the reason the TV studios I worked at used it... and in fact, they still do use it (or the digital continuation of that form, digibeta). I used to borrow a beta machine and take home 'preview' copies of upcoming show episodes to watch at home, and it looked great.
Just like the "DVD still looks great" comments from above though, few consumers could see the visual difference and in the end, it didn't matter that much to them.
Obviously this is still true (video quality matters little to most people) or none of us would watch video on the internet... or play digitally compressed tv signals from Comcast onto our HDTVs ... or in the audio world, none of us would listen to MP3s through cruddy little ear buds....