It's all about risk-reward--who takes the risk and who gets the reward.
For a flat fee, there's no risk for the translator. Do the job, get paid. There's also no potential big payoff. It's a job. The risk is all on the content creator/publisher--as is the reward forever after.
For royalty split, the risk shifts to the translator, because the creator's already done the work. If expected sales are big, why share it with a translator? If they're iffy, then pushing the risk onto the translator makes sense for the creator.
The best model would probably be some kind of hybrid, if it could be worked, something more like what a tradpubbed author gets. An advance against earnings up front, and a piece of the back end after that earns out. So for a translator, that could be a lower amount than usual as an advance, then a percentage of future sales. That splits the risk back onto both parties, depending on how it's negotiated.
Say a translator usually gets (round number) 10c a word. That's $10K for a 100K word book. A fair hybrid might be a $5000 advance, with a a 50% royalty split of net earnings. The author/publisher recoups the advance first. If they never do, then the translator still has their advance. If the book earns out, though, for all net above $5K they are getting 50% of earnings.
Really, anything that's fair will work, as long as all parties agree and act in good faith.
