As a researcher, I can read English papers but I'm not able to write an article in proper academic English. I can’t ask a journal to publish me the way I write because I lack the level for it.
At the same time, the main journals are mostly publish in English. At least in my discipline, there are very few Thompson Reuters journals in Spanish. If I want my research to be read and discussed, I need it publishes in English. [Science is also a colonialist power play] It is my responsibility to look either for a good translator or a proofreader.
I read somewhere that papers coming from English-speaking countries has a significantly lower reject rates. There could be a lot of causes of the higher rejection rate for non-natives but an educate guess make me think that being unreadable might be an important issue.
I think you did the right thing. The main purposes of one role as reviewers is to seek the advance of scientific knowledge. If language is an issue, telling so to the authors is the most honest approach.