I understand it could be looked at that way. The point was that it was not because they do not like foreigners, but because they feel they cannot uphold their service standards if they cannot communicate. Maintaining the expected quality service and reputation for that excellence is the only thing that matters and not doing so would bring shame. It is a very uniquely Japanese view on things and I do not in this case see it as racist. The reality is that the Japanese think very differently then most western (EU/US) and it can be very hard for outsiders to understand or even relate.