Eventually I came to this explanation: their culture is obsessed with perfection, from perfectly paved roads to perfectly preserved temples to perfectly presented food, etc...but this pursuit of perfection in the hands of bureaucrats leads to processes where everything is captured in detail, approved by multiple people, etc. Basically, in the eyes of a bureaucrat, 'perfection' is a rock-solid paper-trail rather than a frictionless experience for the citizens.
I find some people just love process and bureaucracy for its own sake and will ad it endlessly because they think it is their job, but not out of some effort to keep jobs going. There are countries where government spending is a political issue and a way to satisfy constitutions and keep things afloat, but Japan doesn't strike me as one of those.