It seems more and more likely that the guys at Epic just do not like Nintendo, and personally I think that's ok. Companies are composed of people and sometimes the people at the top will have their console biases due to their personal experiences with one console or another. It's similar to how if someone says "they should port TLS to PS3" one of the responses you hear is "Sakaguchi hates Sony so that would never happen". Sakaguchi hating Sony is fine and noone calls him a dousche for it as far as I can remember so I think Epic can do the same with Nintendo.
As far as the actual statement, it's probably less that running UE3 on 3DS is impossible, and more that it is more work than it is worth in the minds of Epic. Development on Nintendo hardware is not really heavily middleware dependent to the best of my knowledge and they probably just think that after finally getting it working, not enough companies would use it to make it worth their time. True or not, I think that's the logic they're going with.
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