Essentially although less a case of WC3 not selling and more a case of going in expecting WC4 not to sell like WC3 had.
Full localizations were incredibly expensive at the time and Wing Commander III was a bit of a high water mark with six of them. No other release in the series matched that. Origin typically produced the French and German locs alongside the games but it would've been up to Electronic Arts' local to decide to fund anything else... and they would have to do so after the fact. Wing Commander III was a massive hit beyond expectations in the US so it made sense to fund Korean, Japanese and Spanish dubs for 1995...
... but Wing Commander IV as going to be a tougher sale all around and that was apparent throughout the process. The localizations would both be much more expensive (because of the amount of material) and they would be for a product that wasn't seen as groundbreaking. It was also seen as a transitional product--1996 was the end of the line for MS-DOS and the start of the move to Windows 95 (which was adopted more quickly in Japan). Fans like to come up with these narratives of games (or movies) failing and shocking everyone and then the company reacting... but the more boring reality most of the time everybody goes in knowing exactly what's going to happen--and they budget accordingly!