"They wouldn't be competing with full-on sportbikes, Harley has an appeal based on crieria other than full on performance,"
Yes, this is true in the cruiser market, but not in the sportbike market. These are two different markets with two completely different customers.
"so the Japanese "first or die" competition standard wouldn't apply to them, "
If they hope to compete in the same market as the Japanese, then performance criteria is the ONLY thing that matters, and it most certainly WOULD apply to them.