Edit:
That's a nice summary Harvey, much appreciated
I have a few thoughts to add to discussion, based on personal experience.
Recently, I have changed my opinion on the reason the US, Germany, and other markets got the ACT-4 system. Today, in California, the SVX is except from the roller test. As an original owner of a 92 SVX, my first smog test was done registering in the State of Nevada. The car was exempt from the roller test. I'm not aware of any States, or any emission certification stations that incur the liability of installing the fwd fuse for the purpose of smog certification on rollers. That doesn't mean it has not happened, only that I am not aware of it. I've never been confronted with a 'mandatory' rolling smog dyno test with the ACT-4.
The smog certification theory always caused doubt for that reason. If Subaru installed the VTD system, which Subaru first sold here in the 2002 4EAT WRX, the car would have been exempt from roller testing, just as it is today. A manufacturer has no obligation to manufacture a car that can be tested in a certain way, rather, if technology doesn't exist to test cars without damaging the cars, the requirement is waved.
I recently purchased a '95 project. The car had issues, including installation of the fwd fuse. Comparing speed and rpm, I determined the car had been fitted with a 4.444 front diff or with a complete transmission, but hard to say, no numbers on the transmission. The stock 3.545 rear diff was still in the car. A 4.444 rear diff was then installed. A couple of 340 mile runs were made, before installing a 4.444 VTD transmission.
Both front and rear diffs were filled with Swepco Moly gear lube. Earlier, I in this post I reported a difference of 9% in fuel economy. Upon reviewing the calculations, the ACT was calculated at 355 miles, while the VTD was calculated at 326 miles, for the same trips
A careful review of the receipts fuel used on ACT run and VTD run showed virtually no difference in fuel used on long, 70 mph, Cruise mode runs. CAFE Corporate Average Fuel Economy may not be a factor in the absence of VTD in America, even though all of our VTD cars seem to be slightly more thirsty. Maybe its me
So, we are back to two possible reasons for omitting VTD technology, maybe each reason enough to install the ACT-4 in its place. First, the dyno reason explained by Harvey, the reason we have always believed. Second, cost. That planetary center differential looks costly
That said, the VTD was Subaru's crowning achievement in awd technology.
The dollar/yen exchange rate was strongly against the dollar in 1992. There was great concern about selling a $25,000 Subaru. After the 92s were sold at discount, and the small run of Barcelona Red 93s, Subaru introduced front wheel drive cars in 94 and 95 to contain the price. Not only was VTD not available, ACT-4, sunroofs, etc. was absent on the FWD models. Relatively few 94-97 models were sold in America, or anywhere else.
As for the gearing, the EPA test-cycle is a complicated driving cycle with stop and go driving, speed increases, etc., done on a dyno. Testing my 3.70-geared imports on a dyno was tricky. The car had to be driven very lightly to reach the top of the hill, imposed by increased resistance on the dyno. If the car shifted before the summit, emissions would far exceed limits, and the test would fail. This was an issue with 3.70 gears. I believe that installing 3.545 gears for US SVX had everything to do with the required driving cycle EPA-certification tests
