I'm a bit skeptical, and it looks like most other blogs have accurately labeled this a rumor. If the money has already been spent on development and the work done, it wouldn't make much sense to shelve it. The lack of potential sales is a good reason to not develop a Western version, but not to hold onto a nearly completed version. I suspect that either the "source" is grossly exaggerating the amount of localization completed, or the rumor is bogus.