Why did the Mercure fail?
Mainly because the short haul market needed to wait for the deregulation of the late 70s into the early 80s that resulted in the creation, by the early 90s, of the hub and spoke concept with small regional jets feeding hubs where the mainliners were.  

The CRJ200 was the main pioneer of this market, as an up to date rendition of a smaller regional feeder jet. At the time it was expected to sell maybe a couple hundred units, even within Canadair.