A few reasons.
The first is that English and Japanese are extremely different languages. Some things simply don't translate, and that problem gets worse with languages that are distant. Take the phrase "a tangerine on an aluminum can." In English, it's just a phrase, but anyone who knows the Japanese would recognize it as a (extremely lame) pun. Not puns get lost in the translation. Take the Swahili phrase "tuko pamoja." It literally means "we're together," but to a native speaker, it conveys a much deeper meaning of shared purpose. A good translator would have to render it differently. It's why machine translations suck: Google translate is great at the actual meaning of words, terrible at putting them in proper context and getting the meaning of the entire text.
The second reason is that culture doesn't translate. My character's name, "Taylor Swiftcast" is humorless to people who don't know who Taylor Swift is. Even among people who do, it's considerably less funny to some people who don't like her music.
The big reason is that localization is not quite translation, and it shouldn't be. Go play FFVII (make sure to remove nostalgia goggles.) Even ignoring the errors, it's translation is flat. Characters don't talk like actual people. They don't have speech patterns or any sort of flow to their speech. Then play Vagrant Story and Final Fantasy XII, both incidentally, translated by the excellent Alexander O. Smith. Both have characters talking in a believable way. Sydney speaks in a roundabout way, with lots of metaphors, whereas Ashley is direct and blunt. Larsa and Ashe speak with lots of carefully chosen words and a high-class diction. Penelo and Vaan speak much more colloquially.
XIV is localized extremely well. Everything is understandable, and artful. Yes, some things are lost in translation, but the writing can stand on its own as good video game writing, not some dry academic translation of the original Japanese.