Argentina lost its spot in the Visa Waiver Program in 2002. Admission into the VWP is almost entirely a political decision. There are non-political factors that come into play, such as the percentage of people who are denied visas prior to VWP admittance. I think you're right about the 5-year period. I can't remember when they were admitted into the program.
After 9/11, it's even more political, as
cooperation on security-related matters is more important than ever. Given that cooperation with the U.S. on these matters is viewed as imperialistic and a threat to Argentina's sovereignty, I wouldn't expect Argentina being admitted into the VWP anytime soon. The
confiscation of the U.S. plane a few months ago didn't help.