I think its that they are worried about getting a shitty multiplatform game vs good exclusive.
And a lot of games really do get dumbed down, Or the PC version gets ignored and is released unstable, lacking in features or with a clunky interface.
Even so, The whole time I was playing the original Witcher I was thinking to myself that there is no reason it wouldn't work perfectly fine on consoles. I'm sure they would have censored some of the game, But they did that anyway in the US release.
They might have to change the UI around a bit, And while I would rather not use a console style interface, it wouldn't have been any worse then what was already in there.
I was disappointed when they canceled the original port, I probably would have bought it again on 360 just so I could get some of my consoles only friends to play it.