Speaking of this whole discussion, XENOBLADE GET!
And sorry, bv, but this debate has now released my pessimism limiter.
1) Unlike Mistwalker or Monolith Soft, Square-Enix would be more than capable of publishing Dragon Quest X in the West themselves if Nintendo doesn't. Square-Enix publishes games. In fact that's most of what they do. And they do it in the West.
Sigma Harmonics, Blood of Bahamut, Front Mission 2089, the SaGa remakes, Nanashi no Game (which they infamously didn't localize because a focus group made up of FPS bros didn't like it), and soon to be Final Fantasy Type-0, all in the past few years. While they still have an overall positive localization record, they've had their fair share of games stranded in Japan. I anticipate that this will become worse over time as Square's acquisition of Eidos nets them far more Western money than their small-scale RPG localizations have, and there's no guarantee that they would have ever brought over Dragon Quest VI or IX had Nintendo not stepped in. Dragon Quest V bombed horribly and didn't receive a second print run until recently, and Square was
very quiet on the franchise for a long time afterward.
2) Looking at sales of Dragon Quest VI and DQM:J2 is pretty moot to this discussion. Nintendo threw a hell of a lot of marketing weight behind Dragon Quest IX (Seth Green!) and the game sold over a million copies in the West, which I think would be considered a success.
Nintendo is known to abandon their publishing partners at the first sign that they're not making money hand over fist for Nintendo. They partnered with Koei to make Samurai Warriors 3 a Wii exclusive, but when it didn't sell as much as the average numbered Warriors game in Japan Nintendo dragged their feet on the localization forever, then finally released it in Europe months before North America and sent it to die here. Nintendo neither helped finance nor offered to publish any further games from the company afterward. Koei went on to remake Samurai Warriors 3 for PS3, but they can't release it here because Nintendo has their balls in a vice concerning rights to the localization and publishing.
I don't see how DQVI and DQMJ2's poor performance is moot, as this is the very thing for which Nintendo will kick a publishing partner to the curb. If Nintendo saw continued potential in the Dragon Quest franchise, they would have advertised VI and Joker 2 significantly more than they did (read: not at all.)
3) Dragon Quest isn't some new IP from a lesser known developer. Main series Dragon Quest games are made, and then they're released here. That's been the status quo for a decade.
Again, after Square's acquisition of Eidos, they no longer need to support JRPGs outside of Final Fantasy/Kingdom Hearts to succeed in the West. There's no indication that DQ has ever been considered a core Square-Enix IP outside of Japan, sadly.