What makes inertial guidance unsuitable for auto-land?
Suitability for CAT III autoland requires much more than just accuracy. A big factor is system integrity which involves fault detection and alerting. Fault detection in autoland approved ILS/MLS/GLS receivers dual channel processing (command and monitor) with continuous cross-checking and required detection and alerting response times. In the multi-mode receivers (MMR) I've worked on, the monitor tripped if the two channels disagreed by more than 0.0065 DDM for a period of 350 milliseconds. Total time to alert has to be less than 1 second.  

To my knowledge, as a result of that requirement GLS has not been approved for less than CAT I approaches as they have not been able to demonstrate the necessary integrity and time to alarm.   

I don't know of any method for monitoring an INS system that would be able to meet the requirements. The FMS I work with is capable of detecting and excluding an IRU from the nav solution, but the tolerances are much larger than what would be required for approach and it requires much more than 1 second.  

The best reference for what is needed is AC 120-28D. Section 5 covers the Airborne Equipment requirements.

Ultimately, it not only has to work, you have to be able to get it approved. That is not a trivial or inexpensive process, even with published standards. Doing something new, without industry standards, is significantly more difficult. Can you make a business case that would show a long term savings?