I can read Japanese personally, and have played through the English versions of Earthbound and Earthbound Zero, as well as the Japanese versions of Mother 1-3 (twice for Mother 2), so I'm not personally affected one way or the other, but I can't see why they couldn't have done a limited U.S./European release of Mother 3. Sure, the hype didn't work for Earthbound, but over time it became a cult game that more and more people who had never even heard of it the first time around (including me) were playing and praising. Phoenix Wright is much more difficult to localize for non-Japanese audiences, but they released it anyway. I actually thought they were crazy; I enjoyed Gyakuten Saiban, but I didn't think it was even possible to make it accessible outside Japan. Whaddya know, it became a big hit and quickly sold out the initial production run.
I'm not saying that Mother 3 would also be a hit (at least not to the extent it was in Japan), but they could have at least made it work, as long as they didn't set their initial sales expectations too high like they did for Earthbound.