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Even if we accept that this quote is 100% real and an accurate translation of what was actually said, why would it be bad?
New York is more racially and culturally diverse than any part of Japan. I think that is generally accepted as true. If you were to adapt a region outside of Japan for the first time, and the region you chose was particularly cosmopolitan,
why would you not include that aspect?
I think it also reflected a shift in attitude in the developers after recognising that they were not making small indie games exclusively for the Japanese market anymore, but for an international audience. Why not explore other cultural settings, even if Japanese sensibilities are going to creep in as a result of being a Japanese development team?
And finally, I don't think that killed Pokémania. Pokémania was dead by the time Ruby and Sapphire came out, never mind Black and White. Yes, the franchise was in a bit of a lull during gen 5, but Pokémania was a phenomenon that expired a decade before it and applied to gens 1 and 2.
