This thread was inspired by Pretty Soldier Wars A.D. 2048, so we are talking about commercial releases since the beginning.
Contrary to Aaeru claiming that VN has more than a million western readers, I'll agree that it's not very popular in the west or even in some country in Asia itself. And with the scale and nature of the current fanbase, licensing and selling high-quality VNs won't earn high profits. Big companies like Key, Type-Moon, or Giga are used to see big figures and will not deal with localization company, unless they are certain it could sell more than just a mere 5 000 copies. Instead, we got company like Softhouse-Seal for example, who is all too eager to let MG pick any title from their warehouse and eventually lead to MG being labeled as NukigeGamer.
We could say that the majority of the western readers actually loves story-driven title than a nukige, but the fact remains that Boob Wars is MG number #1 high-selling VN, and I don't think we will be seeing anymore story-driven VN from them in a long time if Kara no Shoujo 2 and Cartagra sells flop. I do think that most of VN readers are hardcore pirates too, so we can't expect official titles to sell well either. I think that official localization will not grow and we can't rely on it to deliver big titles.
Chinese (with its large population) and Korean's people could learn and mastered the Japanese language faster I think, and they have bigger work forces and dedication to cover many titles too, so it isn't that surprising to see many fan-translated VNs in their languages, and we can't exactly compete with them either. They are a different kind of beast.
I do think it's the right way. Just look at people saying how TakaJun is disrespecting Majikoi's fans for stalling Miyako's route. Wow, you really don't want to translate for this community.