Not that I am against a foreign coach, but why should the nationality of a coach matter ?
Because in most places, it's easy to get caught-up either in regional-politiking or be accused of doing so. It's already happened with Moores and Prior, in his very first game - fortunately for Moores, to date Prior's performances have kept any accusations like that quiet. But can you imagine if he showed the faith in Prior that Duncan Fletcher did in Geraint Jones, with the player in question performing as poorly as Jones did? The accusations would be all over everywhere you look, even if they weren't true.
Basically, it's almost always best to have a foreigner as your national team coach. Everyone bar Australia (Simpson, Marsh, Buchanan) and Zimbabwe (Houghton) has done best that way...
Bangladesh - Whatmore (Australian)
England - Fletcher (Zimbabwean)
India - Wright (New Zealand)
Kenya - Patil (Indian)
New Zealand - Rixon (Australian)
Pakistan - Woolmer (English)
South Africa - same
Sri Lanka - Whatmore (Australian)
West Indies - no-one, really
EDIT: Manan's beaten me to some of what I just said.