And were was this huge older loyal audience when Baten Kaitos Origin was released at the end of the Gamecubes lifespan and sold less than 20k in North America? Yes the Gamecube was basically dead, but three months later the Gamecube version of Twilight Princess sold over 500k on it's opening month.
I know Zelda is much bigger than Baten Kaitos, but the point still stands that there was at least 500k people that still had active Gamecube's in 2006, but less than 20k of them bought Origins. This is why I can't really blame Reggie too much for being a little more concerned because he knows that the internet fans that constantly complain only make up a very small percent of the overall market he's responsible for.
Of course I do feel that if marketed properly, NOA could have did what they did with Dragon Quest IX and Monster Hunter 3 and helped both games do several hundred thousand. Of course in the case of Dragon Quest and Monster Hunter, NCL had to mandate NOA to help market both games. But in both cases, since NCL was doing the ordering, had either game failed in North America, Reggie could at least make an argument that he felt the series didn't have any appeal to the market and NCL shouldn't have demanded him to release them. If Xenoblade was to come out in North America and fail, then the blame would rely 100% on Reggie since he would have made that decision, and he'd have no way of redirecting some of the blame back to Iwata by saying he was against the decision.