The situation has to be very serious considering the staff were evacuated, some returned for a so called suicide mission. But if the plants workers are leaving and helicopters are beeing called in to dump water on the reactors and fire trucks are doing likewise. It really doesn't sound like the situation is under control or as bad as the american situation.
Also sure you can't close plants over night, but the Japanese Government knew that this plant was to old. Newer plants were built to sustain earthquakes. The Government knowing this facility was out of date and a threat to the public should have closed it. Sure electricity might have been more scarse but look at the situation now, was it really worth this possible meltdown?
Personally I am for Nuclear power, as long as their are enough fail safes and safety measures in place to protect the populous. In the case of Japan, their were not enough fail safes and the facility was known to be too old. If I were in Japan or any other country with a known plant that isn't up to date and code. Yes I'd be against Nuclear Power in those cases.
The Diesel Generators are backup. That's their primary purpose, is to serve as backup. If your backup is gone, it's gone. There's no point in saying if only we had another set of backup because it'll just go on and on. Some pumps may be flooded with seawater but they definitely have other sets of pumps to pump water through the core. The main problem was restoring power. They have some power and are circulating it through the reactor. All of the reactors are shut down. However, the reactors are continuously giving off decay heat which has to be continuously cooled. It's not a matter of pumping water through it once and then it'll be cooled. The firefighters are spraying water into the spent fuel pool to shield radiation from it. Of course, the situation is very serious but it can be definitely be contained. As I said, if it's like Three Mile Island, the results won't be as bad as you think.
In terms of it being closed sooner, you saying this with the power of hindsight. They were planning on shutting down the plant but there are schedules with these types of things. The plant may have being old, but it wasn't a threat to public safety. Being old and not being up to code are 2 different things. Let's say they decided to shut this plant down 4 years ago, and the schedule for the shut down spans over 5 years. How would you honestly know that a 9.0 earthquake would strike in the 4th year? Sure, you can take precautions for natural disasters, but that's just a vague idea somewhere in the future that you really can't forsee. It would be a shot in the dark.