I had a similar problem to this.
I played as East Bengal in the Indian league. I won the domestic title 7 times in a row, the domestic cup 6 times in a row, the asian champions league 4 times and the world club championship twice. I was also reguarly attracting crowds of 45,000 for league games and even 110,000 (played in the national stadium) for asian cup games. Not to mention being the 9th ritchest club in the world!
I was constantly knocking out and beating teams with a "continental" reputation yet in my whole time I never managed to advance from a "national" reputation. Surely my continental dominance and even world success warranted a higher profile? The game didnt seem to think so and I constantly struggled to keep hold of and attract players.
It gets slightly frustrating when your getting "snubbed" by players from Uzbekistan
Just an illustration of how the reputation problem tranlates in a slightly more extreme example.