ToV isn't crap, I played it recently and I'll admit it is better then the gamecube version. It is probably the best next gen JRPG but only because the bar for JRPGs not on the PS2 is pretty low. I would say Disgaea 3 is better but some will say thats a strategy RPG not a real JRPG so fine, ToV it is. IU, Lost Odyssey, Blue Dragon and all the rest of the 360 exclusive JRPGs however are quite crap, though I guess again you could make the argument that crap JRPGs are better then no JRPGs and possibly be right.
As to Sony not serving Japan though, you'd be wrong. There have been several quite good Japanese centered games from Sony or exclusive to Sony machines. They have just mainly been on the PSP (and sometimes the PS2). Joan de Arc, the Persona games, Final Fantasy 7 Crisis Core, Final Fantasy Tactics on the PSP, Monster Hunter 2nd G and others have all come recently and are clearly driving PSP sales in Japan. Sony has probably realized, and rightly so, until they can get the costs of the PS3 down their best road into Japan is the PSP.
Yes you showed the from release numbers and the PSP is well behind the PS2 still, but if you look at the recent trajectory the PSP sales are increasing at a higher amount then the PS2 sales were at the same time period. Handhelds also seem to stay "current" far longer then consoles, which also helps PSP adoption. I wouldn't be surprised if both the DS and PSP end up having an 8 year lifespan before being replaced.
As to profit, running in the red only works and makes sense if you care mainly about running the other guy out and have buckets of money from other ventures. Sony has some money from other things like TVs and speakers, but doesn't have Microsoft monopoly money and is in the video game business to make video game systems and decent profits.
Microsoft has stated publicly that they are in video games, and will spend anything it takes (even 6+ billion in losses), to push Sony out of the living room. Yes Microsoft can afford to lose money hand over fist since they're making so much charging 1000 dollars for Office and 400 dollars for a full featured version of Vista. Sony can't afford to run at a loss and so needs to actually think about keeping the price of the PS3 at a level where they don't lose billions. Is Sony somehow evil for not cutting to the bone and being run out of business by Microsoft throwing billions at forcing them out?
Either way if MS is going to be a real sony competitor in Japan they need A) a handheld system and B) more JRPG games that get better then 7 out of 10 then just ToV.
PSN ID: ChosenOne feel free to add me