It's not the question wether the 128 sold, but wether it made sense as a project.

1st hint is the Z80 which made it complicated/expensive to build, all for running C/PM an OS already on it's dead bed by that time. The 128mode might have made sense if it had come in updated C64 chips (maybe it did no expert on the 128).

What it should have been.

C64CR as super-cheap base and an 128 that just offered bit more while costing only extra pennies, just like A500 vs A500+.

So yes, add "HighRes" (aka 80 col), yes add a bit more RAM, yes add the floppy (that everyone had to have anyways) and maybe add some MHz.

If that didn't work, start developing the A1000CR 2 years earlier (aka A500).