This feature is not yet available because it's quite difficult to perform OCR (optical character recognition) on a photo, especially if you don't even know the language of the text.
"Right now this technology only works for German-to-English translations and it's not yet ready for prime time. However, it shows a lot of promise for what the future might hold. Soon your phone will be able to translate signs, posters and other foreign text instantly into your language. Eventually, we're hoping to build a version of Google Goggles that can translate between all of the 52 languages currently supported by Google Translate — bringing even more information to you on the go," says Hartmut Neven.
Google tests an API for Google Docs that lets you perform OCR on a high-resolution image, but the results aren't impressive. Maybe the OCR service should be released in Google Labs.
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