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I won't speak for earlier times, but at least recently, have you examined what type of games Japan is interested in? Handhelds rule the charts there, with expanded audience games being close behind. There are still some traditional titles that do well, but for the most part they're called "Final Fantasy," "Monster Hunter," or "Pokemon." Even many other JRPGs seem to be seeing declining sales in the region.

There are a few other games, here and there, that also do well, but not all that many. And considering how the West isn't targeting the expanded audience (effectively, anyways), or making all that many handheld games...

Well, there we have it.