First off, the Touareg V10 has the worst emissions if you measure emissions the way we measure them in the US.
If you measure them the way they're measured in Europe, it doesn't even come CLOSE.
Anyway, the reason why we don't get the Lupo now is because nobody gets the Lupo now, the markets that got the Lupo before now get the Fox, a Brazilian-designed replacement for it.
But, we didn't get the Lupo in the past because... when the Lupo came out, 1999, it was a size class
smaller than the Geo Metro. Think of how the Geo Metro is perceived - as the ultimate in penalty boxes, as a car that you WILL die in if you get in a minor fender bender, etc., etc. Just think how a car that's one size smaller would be perceived - even if it got 78 MPG combined (for the 3L TDI, which had an aluminum block 1.2L and an automated 5-spd manual trans.)
They would've sold a few to us crazies, and then they would've lost their shirts. Keep in mind, the Lupo was made in Germany.