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I'd blame it on Tony Leung Chiu Wai's furious naked thrusting (it upset the MPAA) but the Academy's foreign committee nominated the French scorcher Betty Blue back in its day and that film opens with Jean-Hugues Anglade thrusting away atop Béatrice Dalle so it's not that. They don't outlaw content.
Maybe Tang Wei's mesmerizing flexibility (her leg is where now?!?) reminded them that they don't like productions that stretch across too many borders and Ang Lee's films always do. His three previous nominees were all submitted by Taiwan (and accepted by Oscar) but Ang Lee can't stay put: The gay romantic dramedy The Wedding Banquet took place in New York, Eat Drink Man Woman cooked in Taipei and the third, foreign film winner Crouching Tiger Hidden Dragon flew all over China --borders, international financing, indigenous languages and "country of origin" concerns were just about the last thing on its mind as it balanced serenely on leafy branches between rounds of ass kicking.
Speaking of... who wants to kick the Academy's?