Language and ethnicity are essentially the same thing. Okay, obviously they're not TECHNICALLY the same thing, but language is one of the two primary factors that determines culture (along with environment).
I don't see anything that language could bring to the game that ethnicities don't already (yes, I've read the suggestions in this thread).
The only thing I could see working is some sort of lingua-franca developing later in the game. But what would determine what the lingua-franca is? And, more importantly, how would it affect gameplay?
Anything that a language system would bring to the game I feel would be adequately covered in an expansion of the culture/ethnicity/religion systems. I feel that some sort of "translation" or "understand foreign languages" system would needlessly complicate diplomacy and would serve as more of a distraction than anything.