This article is from the Final-Fantasy and other Square Soft Games FAQ, by firstname.lastname@example.org (Nick Zitzmann) with numerous contributions by others.
This is a hard question to answer. The truth is, though, that Square
Soft can only translate and release what Square Co. Ltd tells it to
translate and release.
Believe it or not, there are cultural differences between Japan and the
United States. What could be considered decent in Japan can be
considered "mature" in the United States, and vice versa. Square has
been notorious for holding back some games (eg. Xenogears) due to mature
themes that may offend American customers.
The other thing involved is economics. In the USA, role-playing games
don't sell well compared to action and sports games. What makes more
economical sense, to release a game in one area and sell millions of
copies of the game, or release generally the same game in another place
and only sell hundreds of thousands of copies?