MK is not popular in Asia, which is probably why MK9 won’t get an arcade version. That’s why I think Street Fighter vs. Mortal Kombat is such a great opportunity-- basically, you use Street Fighter’s characters and some of its gameplay elements to help introduce Asian players to MK, and of course we already know it will sell like hamburgers on a stick over here in the West anyway so there’s little doubt it will make a good amount of money.
Not all of Asia hates MvC3.
Fun fact: a bunch of guys in the Philippines have hacked some XBox 360’s to run inside arcade machines just for the community. Those who aren’t still playing MvC2 that is. Also, any arcade in the Philippines worth its salt will have MvC2.
I’ve already seen images of custom MK arcade cabinets around the internet, and if MK continues to be popular I wouldn’t be surprised if we see them occasionally show up at tourneys. I’m pretty sure we’ll see some custom MVC3 machines around too, like the ones you described in the Philippines.