I think you're being hyperbolic here in saying that the standards are impossible to meet. What about urea injection? That works pretty well, right?

But even ignoring that, it's not like there's some god-given right to run diesel engines. Either the emissions standards are reasonable or they aren't. That's the only consideration here. If they are reasonable, and most diesels can't meet them, well then too bad, diesel is just an inferior technology. There's alternatives that don't find it impossible to meet environmental/health standards.