The problem with that engine (1.6 TDI) in the Passat is that the car would be unacceptably slow to the typical American driver.
They would have to rename it “Pass Not”.
The 2.0 TDI in the current Passat yields 8.5-9.0 second 0-60 times. A 1.6 would put it among the slowest vehicles currently for sale in the USA, and at a premium price. VW is smart to avoid going down that road.