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1) They developed a negative reputation as being stinky, noisy, and complete dogs when it comes to performance.

2) Something to do with the sulfur in US diesel. Up until somewhere around 2005, US diesel had more sulfur than, for example, Europe. I think the issue was that diesel passenger cars would have trouble passing emissions requirements due to the fuel. (Trucks generally have more relaxed requirements)

Edit: Ah, here we go:

http://en.wikipedia.org/wiki/Ultra-low-sulfur_diesel#United_...

Start at the paragraph beginning with "The allowable sulfur content..."



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