Allah is all-knowledgeable and all-wise and, in his infinite wisdom, he decided to reveal this as an Arabic Qur'an. I can certainly see some wisdom in it, but due to my limitations, I cannot know the real reasons behind Allah's decision. Allah is also all-powerful and, had he wished, he could have revealed the Qur'an in all languages. So the answer to questions starting with "Why couldn't God have..." are that he could have but, in his infinite wisdom, decided not to. This answer may not satisfy some people, but I am completely confident and secure with providing this as an answer.
From the benefits of having the Qur'an in a single language is that the language serves as a uniting factor of the Muslims. Consider what the orientalist Philip DeTrazy writes:
Due to the power of the Qur'an, the Muslims have become a united nation in their language, religion, laws and politics. For the Qur'an has combined all the Arabs, and it is inconceivable that, were it not for the Qur'an, classical Arabic would have spread among them...And were it not for the Qur'an, numerous peoples would not have taken up the language, and learnt how to read and write it, and studied it and worked with it. And were it not for the Qur'an, every nation among the nations of Muslims would have had their own language...So the Qur'an has been the source of preserving communcation between the Islamic and Arab nations. [1]
Also, consider the advice given to the French government by its consulate in Algeria during the French occupation of Algeria:
We will never be able to overpower the Algerians as long as they read the Qur'an and speak Arabic. Therefore, we must remove the Arabic Qur'an from their midst, and abolish the Arabic language from their tongues. [2]
Be that as it may, it isn't true that a person simply cannot understand the Qur'an at all by reading a translation. They can gain a good understanding by reading a translation alongside a good, reliable commentary (such as that of Ibn Katheer or At-Tabari). The truth is that a person cannot fully understand and appreciate the depth of meaning behind what the Qur'an says without knowledge of the Arabic language. I myself do not know Arabic but I have read around the topic and have read an explanation of several verses from a linguistic point of view and I can honestly say that it is a fascinating area of study.
Nevertheless, as I mentioned earlier, it isn't necessary to know the Arabic language to realise the miraculous nature of the Qur'an. The Qur'an as a literary miracle can still be appreciated by explanation and by looking at it from a historical perspective. The other aspects of the Qur'an's miraculous nature (such as the fulfillment of specific prophecies) do not get lost in translation anyway. A person who is sincere, logical and open-minded can absolutely grasp that the Qur'an was not an invention by Prophet Muhammad () - a cursory analysis of whose life and behaviour shows quite clearly that he had no motive to lie about such a thing, and that he was somehow 'mistaken' about receiving revelations is plainly an absurd suggestion - but a revelation from Allah. Indeed, many intelligent people have grasped this and have converted to Islam. Unfortunately, there are others who, despite clear explanation upon clear explanation, will remain forever persistent in their disbelief and it is these people that, as much as we want to, we cannot help.
[1] An Introduction to the Sciences of the Qur'aan by Yasir Qadhi, p. 354 who translated it from Aboo Ubaadah, p. 15.
[2] An Introduction to the Sciences of the Qur'aan by Yasir Qadhi, p. 355 who translated it from Aboo Ubaadah, p.44
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