There was still plenty of time for BSD to become dominant, but it just didn't happen, and although some people still insist that BSD is the platform of choice for companies (even namedropping organisations like Juniper Networks and IronPort), it's clear that a combination of licensing and collaborative factors have helped Linux to thrive where various BSDs have withered away from the opportunities.
And with regard to the timing, back in around 1994, I remember people explicitly choosing one of the BSDs - NetBSD, in fact - as the focus of a replacement operating system project for the Acorn Risc PC, which shipped with Acorn's proprietary microcomputer operating system, RISC OS, that many people were increasingly fed up with (Acorn having given up on UNIX). For reasons of maturity and portability, NetBSD was preferred over Linux, and sure enough the project did indeed deliver "RiscBSD". Meanwhile, Russell King managed to port Linux to ARM.
I'm sure there are some readers who are more familiar with this topic than I am, but although you can still get NetBSD for a range of ARM devices (including various Acorn machines), it's some variant of Linux that is dominant on ARM. Although the RiscBSD people tried to get the likes of Oracle to use their work (and IBM was apparently shipping BSD on top of Workplace OS), all that is ancient history now.
So, no, I don't buy the argument that a lawsuit ruined things for the BSDs and in a narrow window of time in the early 1990s Linux explosively filled the vacuum completely. There's a good part of a decade to account for, as well as the situation today.