Well, it didn’t pay itself, so it failed. 
It’s not a judgement on the quality of the game.
In the end of the day, it’s the company’s choice, we can only conjecture. Putting myself in their shoes, I wouldn’t be willing to commit to anything without a real, concrete need. I believe there’s a chance they could be convinced, but only if you already have a game ready for publication, and no one is willing to spend months working on something that only has a chance of getting accepted.
One way they could circumvent not knowing the target language, for example, is demanding a public beta test of the translated version, not unlike what a normal HG game goes through, and rely on the community to pick up anything weird. I don’t think they read through every word of submitted hosted games, anyway. So it wouldn’t be that different.
But like I said, I don’t think they would ever make it an official company procedure without the need. And on the other hand, authors are not willing to take the risk. So it’s a standoff.
I don’t think anyone was seriously considering that, though. A translated version would have to be done like Choice of the Dragon or that one fan translation of Choice of Romance.
On that note, I really think there’s an untapped market out there and that Choice of the Dragon was not the best choice to kick-start an international branch, despite its initial success. As @Jacic mentioned, choice games have changed a lot since CotD was released, not to mention different tastes of different markets.