My understanding is that BMW was considering a liquid cooled, opposed 4, maybe even had started development, then Honda Goldwing beat them to the punch. BMW at the time was absolutely not going to "copy" so ditched the idea and started over. The eventual result was the in-line 4 mounted on its side.
But since BMW is no longer opposed to using common engine configurations I've wondered the same thing, especially after Honda turned the Goldwing into a huge 1,800cc, 6 cylinder motorcycle, and BMW opposed twins are now 1250cc and liquid cooled, what about a liquid cooled, 1,000cc opposed 4?