Robert Kyle explains:
They introduced both Nashville and LA at the same time, adding two new cities at the same time is something.. but adding two new cities from the same country was just too much at the time so Nashville was nuked.
It returned several months later when there were more players AND the economical growth had reached a point where there were enough companies to 'fill out' the city with enough locales.
I think that it was also before the time of 'The Doe' which made achieving locale quality alot harder!