To the OP I say this: Metal Gear Solid 4, Valkryia Chronicles and Demons Souls. 3 of the best games this gen and all from japan.
As for the question of whether the east or west has made the best games, Ill say this: If someone were to ignore games based solely on the fact that they are western or japanese, that person is missing out on absolutely amazing games and can not consider themselves a gaming fan. Doom, Half-Life, Metal Gear, Final fantasy, Fallout, Zelda, Street fighter, Mortal Kombat, Resident Evil, Eternal Darkness. I pity the fool who misses out on any of these games.
Time for hype