The operative words here are: Third Reich.
To the best of my understanding, anything that too easily reminds Germans of the Third Reich is just a no go. It has nothing to do with "value pistol", price point (I really don't like that term), bubbas, class disdain, or anything of the kind. Quite the contrary, I've gotten to understand that HK was quite proud of having produced a high quality, comparatively inexpensive pistol for the low brow and high brow American market. It's just that 'Volks Pistole', as a name, is too much of a reminder of Germany's nazi past to be marketable in Europe.
If someone knows better, don't hesitate to correct me :-)