I am not sure wood fuel is relevant to the D&RG specifically. Certainly all of its tender engines were built for coal fuel, and my recollection of the "mountaineer" is that it also carried the diamond stacks and smaller fuel bunkers typical of coal-fueled engines of the period.
In addition to the some of the above-discussed problems with an engine of that layout (hard to operate, short range) the track itself posed another problem. This was the iron rails era. Iron rails didn't last like steel rails do. European railroads were generally willing to tolerate shorter average rail lifespan than U.S. roads could afford to accept. They routinely ran engines that were somewhat hard on track (road 0-4-0's and 0-6-0's, rigid-frame Singles and 2-4-0's, etc) and a lot of the bigger railroads had the pitifully short rail lifespans to show for it. I've read Midland Railway documents illustrating average rail lifespan on some routes as short as 3-5 years--this being "heavy" 60-66 pound per yard rail. Few to no North American railroads could afford to re-lay so often. Iron and labor were both always in short supply (read: expensive) during that period in most of North America.. The D&RG built most of its original line using 30 pound per yard rail. "Ballast" such as it was usually meant whatever was found on-site. The fairlie not only had a design that's inherently not going to do the track any favors, but its axle loads (equivalent to or exceeding that of a class 60 consolidation!) were also high for rail that light. The first "class 60" from 1877 also proved somewhat heavy and the D&RG spent the next few years buying the lighter class 56 engines instead until it had more route mileage laid with the then-new steel rails.
Trying to take care of the rail was one of the big reasons the 4-4-0 type was so hugely popular in North America for basically the entire iron rails era. It was regarded as easier on track than any other pattern especially if speeds greater than ~15MPH were to be obtained. Note it rapidly declined in popularity right as iron rails gave way to steel circa late 1870's/early 1880's.
Long story short, there were a lot of good reasons why the double fairlie might've worked well in some places but not on the D&RG or in North America more generally. Different designs are suited to different conditions.
