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This is not a direct answer to your question as I am not sure what's going wrong with your approach. I suspect some namespacing issue in play here. Anyway here are 2 alternative solutions for what you're trying to do using launch files:

1. The roslaunch syntax allows for supplying custom arguments to your binary. See the args attribute inside the node element here: http://www.ros.org/wiki/roslaunch/XML/node
2. You can convert your binary arguments to ROS parameters, and add appropriate parameters to your launch file. See http://www.ros.org/wiki/roscpp/Overview/Parameter%20Server