Arcade-styled first person shooters are seriously hard to pull off commercially, even on the PC. It's actually a niche market compared to the Gears of War-styled "story" shooters, large scale multiplayer shooters (UT,BF), and tactical shooters.
People are looking for more perceived sophistication in their products. I think on the PC/360 you can pull it off with a eastern Euro team because of the reduced cost for the niche market, but a top-flight US dev team making a straight run-and-gun shooter is probably a losing proposition.