Japan as a country works differently than most, and they are not outright racist, but they are very skeptical towards things from other countries. Some things they embrace and love, but generally when it comes to technology and such they just scoff at it. This hasn't changed now. If you look at any western game you'll see that even if it's a massive success outside of Japan, it's not really that big in Japan. For example, a GTA-game easily sells 10 million in US+Europe, but in Japan it doesn't even reach 500k - but it's still a success, because nobody expects it to reach 500k because western games generally do poorly in Japan.
The 360, being not a western game but a full-fledged western console, really has an uphill battle trying to establish itself in Japan. It's even worse now, when most JRPGs they could boast with are getting enhanced ports for the PS3. Nobody trusts Microsoft anymore, they know if they just wait a while they'll get their JRPGs for the PS3 anyway.
