I have to admit up front that I am a strong supporter of horizontal opposition; it has got a lot going for it and I wish there were more such engines available.
I agree with some of the things that Pat and others have cited above: I think that flat engines probably are more expensive to build, especially if a split crankcase is used (NB, the Alfa-sud engine had a one-piece crankcase), and this point alone means that it stands little chance in any company run by bean-counters.
I also agree that the greater engine width means that it requires an engine bay and suspension attachment points designed for it. This fact may mitigate against the popular concept of offering one platform with several engine options, unless of course you have several boxer engines you can offer!
They do however offer several advantages: In terms of form factor, they are short in length and relatively low in height, so they go well with design concepts where you want to minimise the engine compartment and maximise the passenger compartment. Typically, if front mounted, they do not encroach on the footwell area, and can be made "crash-friendly" by sliding under the floorpan in a frontal collision.
Considering only 4-cylinder engines for the moment, I have noticed that Lanchester balance shafts tend to be applied to in-line engines at around the 2.2 Litre capacity, whereas the better inherent balance of flat engines permits satisfactory NVH to at least 2.5 Litres. I would think that this would be an offsetting cost factor.
I see no reason why ground clearance should be a negative factor against horizontally-opposed engines. It is certainly not the case for the Jowett Javelin and Jupiter. Further, the exhaust sound is unique and much more interesting than a typical 4-in-line engine. The 1.5 Litre Jowett engine also sounds different from the VW, and I am guessing that the firing order is different. For the Javelin and Jupiter it is: 1423, what is it for the VW?
PJGD