The problem Japanese developers seem to have is that JRPGs are still primarily aimed at teenagers and unforunately, the average age of gamers is 33 in the West. Also, the stories tend to be cliched and writing also tends to be embarrassingly poor with Star Ocean being the most recent example. Persona and TWEWY are a good step in the right direction. Also, FFXIII will probably "reinvent" JRPGs as per usual for the series. Even in Japan, people seem to be getting tired of JRPGs. 10 years ago, practically anything labeled Square would be a hit sales-wise both in and outside Japan. However, that's not true anymore. It doesn't help that the Japanese seem to prefer old IPs than new ones.
If a Western tried to make one, there are two possibilities to what would happen:
1. It would be a very bad game, get bad reviews, and sell poorly(this was already accomplished with Shadow Madness)
or
2. It would get reviews on par with a lot of the biggest budget games, be considered a masterpiece and would become a series that surpasses even Final Fantasy in popularity