The 757 was designed to do several things, as people have mentioned:
Replace the 727 on short domestic runs as air traffic increased
Replace the 707 and DC-8 on transcontinental and shorter intercontinental runs
Maintain commonality and a common type rating with the larger and longer-ranged 767.
The 737 with transcon capabilities didn't appear until the NG
, and is still only useful for thinner lines. The -900X will be the first 180+ passenger (and that's in one class config only) transcon machine in the 737 series.
And the 737's success has be predicated on the increasing power output of the CFM56 engines -- engines that certainly weren't as powerful during the 757 development.
As far as numbers sold, one great advantage the 727 had (and don't get me wrong, I believe the 727 was and is a great airplane, one of my favorites!) was that there was little competition during the 'gravy years' of 727 production. The 757, by comparion, has had the A320 and the 737 variants nipping at its heels during its life.