I'm an architect (of the building kind) who has worked across countries (though not Japan). I have to concur that one of the things which most frequently dictates what gets built is half-baked rules by mortgagers and financiers.

This article also conflates the 'average' and the 'architecture' (as seen on arch daily) which is very much atypical.Though even with the average there is a stronger actual interest in space than in the west (probably due to actual exposure of average people to different spaces). For instance, I remember looking at the website of a mass house-builder in Japan and the big item being advertised was a 1.5m (approx.) half-height 'nook' space in your living room. This would never happen in the west (most people would think 'whatever would I use that for?'.