Summing up some of the comments from various posts on iTMS in Japan...
CD's are quite expensive here, and yes it is cheaper to get Japanese music from other Asian countries. So much so that both the JRIA and Japanese government are taking steps. A quote from Kyodo News February 25th "The Agency for Cultural Affairs plans to propose an amendment to the copyright law to restrict imports of low-priced Japanese music CDs produced abroad for foreign markets...The proposal calls for introducing an ordinance that would ban the CDs for up to seven years after their original release in Japan. The Japanese music industry is demanding a total ban because cheap foreign-made CDs are damaging domestic sales."
Rental CD's are very popular. As mentioned by one poster, the idea was that the music would be copied to MD and could not easily find it's way off the MD and onto another. A portion of the rental amount supposedly goes to the artist (read that as label) and a portion of the blank media cost goes to the JRIA, to be distributed to artists, just how they do this I do not know...but I think the artist is still the worst off of the parties.
Tower Records charges full price for CD's of Japanese artists (as these disks are distributed by the Japanese record labels) for around $30.00-$35.00. They import the foreign CD's and these sell for around $18.00-$20.00. The Japan release of the foreign music usually includes a bonus track or two and sells for the same price as the Japanese artists, but not worth the extra $8.00-$10.00 really, but the liner notes and track listing are usually translated also, but still not worth it.
Existing download services are limited to what they 'own'. I do not think there is a service witch represents a variety of major labels and artists (please correct me if I am wrong). Not to mention Sony wanting to hold onto their music catalogue. Therefore, the current download charge is quite high (and remember a rental CD single usually has more than 1 track)
Another problem would be that most downloads would be single tracks not albums. It is quite the norm for a Japanese artist to only have 3-5 good songs on a CD (kind of like Eminem!) so why buy or download the whole album if you only want a handful of songs? This is not just my opinion, many of my Japanese friends have said this of a lot of artists. As the label machines would face less revenue from a listener who is fed up of having to buy a whole CD of crap, revenues would drop.
Bottom line, I am sure Apple would launch the iTMS-J tomorrow if they could get an agreement in place, I think it is the labels who want to continue to screw the listener.
Just my 2.1752 cents (at an exchange rate of 108.76)