I'm not sure when MB's 2.1L Diesel 4 requires adblue treatment, but the Urea tank and hardware would really make it difficult to fit this into anything smaller than the GLK or E class (maybe could fit it on a C-class.
I think the VW approach is that the Jetta/Golf don't have Urea since the weight of the vehicle means it can meet targets without Adblue treatment, but the Passat 4 banger does require it, and gets better mileage for it.
Can be tricky trying to package a 20L tank without reducing some other factor (fuel tank size, trunk size, etc)