My theory is it's the abilities that make it so you can't trade the old pokemon from the old games. Think about it you couldn't trade the Pokemon from G/S/C who knew a move that couldn't be learned in the previous games, or a Pokemon from the previous games because that was not inserted in the old games but you could trade Pokemon back that would look the same to the old games.

So that is my theory, but it won't realy matter with Colluseum out and Fire Red and Leaf Green coming out.

Not sure where this came from but even the original pokemon that weren't included in this game have Abilities. (Now whether they do on this game would have to tried out via a GS, but even then you could argue that they do have Abilities on this game just the GS caused a glitch and deleted them or any other sort of arguement.

Or you could just take the actual reason. That the games coding is so far detatched from the coding of the older games, and it would have been technically impossible (or stupidly difficult and time-consuming) to create any kind of link. That and the fact that there are several unalterable things that would have to be altered (moving a RBYGSC poke to RuSa would mean its EVs would have to be cut down to 510, which is impossible, it would have to be given a nature, which would change its stat layout completely, and it would have to be assigned an ability, which would be randomised). In all, it would be far, far too complex to even think about seriously. Especially when you can remake the old games and make a huge wedge of money into the bargain.

No the real reason they didn't do that is Revenue. If they allowed the trading to occur do not think that the Fr/Lg sales would drop considerly? They could have added all that, however then they wouldn't make as much money. It's strictly Business nothing to do with Coding of anysort just Revenue.