He never beat Hogan's rating of 33 million people for the rematch with Andre on SNME back in February of '88. There's other SNME ratings he never beat either (the battle royal that Hogan and Andre were apart of one month before Wrestlemania 3 comes to mind.) Nothing that Austin or Rock did in the Attitude Era ever hit double digits. Granted, there were less channels to choose from back in Hogan's day, but still.
As for the merchandise issue, Austin did surpass Hogan in merch sales but Hogan didn't have as large of quantity of merchandise as Austin did. It seemed like Austin had a new t-shirt coming out every week (not to mention other type of items like his Smoking Skull Replica Belt, which cost $450 if I recall... what did Hogan ever have that was that high-priced?), and with the help of the internet, he was able to have a much better penetration of the market than Hogan had. There was no internet in Hogan's day, wwf.com was only launched in 1998... very conveniently, right when Austin's popularity exploded post-Mania with his feud with Vince.
As for who was more popular, I don't doubt that Austin is most certainly on Hogan's level and got some of the biggest deafening pops in history (most of his pops were bigger than Hogan's, to be honest) but a large part of that was because the Attitude Era had the most rapid wrestling crowds in history. I think only ECW had more passionate fans. Crowds in the AE were popping big for almost everything, even midcarders like Val Venis and The Godfather.
WCW ran themselves into the ground. They dropped their two hottest angles (NWO and Goldberg) and didn't follow up with any new strong ideas. Add to that bad management, giving too much power and creative control to many of the wrestlers, blowing money, never making new stars, horrible storyline after horrible storyline (starting specifically from mid/late '99 to WCW's demise) and the fact that Turner executives hated wrestling and always wanted it off their network and you have the recipe for disaster. I can sit here and talk about all the things WCW did to dig their own grave without even bringing WWF into it at all.
