It's one thing to run a soccer comp in the third world where every team is dealing with the same market disadvantages. The economy of the competition scales appropriately. But a single team from a third world country in a competition entirely built on the economics of two first world countries just doesn't make sense. The only way it can possible work is as a charity exercise where the entire operation is subsidised substantially or entirely from outside the country and/or via government. But to suggest that the game and the PNG government could ever justify subsidising an NRL operation in Port Moresby to the tune of $15m per season (and growing) and start up costs upwards of $100m is just ridiculous. Where the PNG government is concerned I'd suggest it'd be almost immoral given how desperately the people of PNG need improvements in basic services.
Perhaps... but then, if there was some way to provide the training and expertise necessary to construct a modern stadium to PNG locals, Oxfam-style, this then leaves them with a marketable skill. And the infusion of investment capital and accompanying commercial interest could prove beneficial on top of that. I do not think it is a stretch to say that PNG would get behind its own NRL team in a big way, but the problem is that it would take a long time (if ever) before the investment repaid itself.
That said, the NRL already has the Storm and the Sharks on life support, so...
PNG aren't even close to being a competitive international team.
More due to a lack of opportunity than anything else. Compare the rest of the world to the Kangaroos; we destroy them on a regular basis; losses are a possibility but require a lot of factors (idiotic selections, idiotic coaches, injuries to key players, the best coach the game has ever seen and possibly will ever see helping the opposition...) to align.
PNG does not have access to the same resources and training we do. Nor does New Zealand or the UK or Russia. Overcome that hurdle, however, and who knows what will happen? If all the PNG players were based in the NRL, their performances in the Test arena would be an order of magnitude more impressive on the back of that alone.