I don't think tourist prices in Japan have gone down. However I am convinced that most newspaper and magazine travel reports have played up the high costs to JUSTIFY the expense accounts of those writers. Sure, one can find $300/night and up hotels there, but so can one find those prices in SF, NYC, Boston, etc. One can find dinners that cost upwards of $100 per person in Japan, but so can one find those in Paris, London and many US cities.
My wife and I do NOT travel at that level of indulgence. We like en suite facilities, a clean and quiet room, and ideally some kind of breakfast service. We do not need a 5 room suite at the Ritz or the Palace, etc. By using a Frommer's or similar budget travel guide or even Tripadvisor on the internet, it is EASY to find reasonable and most satisfactory hotels almost anywhere in the world, including Japan. Finding a reasonable and appetizing place for dinner in ANY of the Japanese cities pretty much requires just checking out the local dining near any of the train stations or asking at your (reasonably priced) hotel where they recommend.
By the way, one does NOT need "first class" train seating in Japan nor are reserved seats really necessary. Our Japanese friends met us recently for that visit to the auto show, and they had NEVER had first class seats or even reserved seats! For intercity trains it just isn't really necessary.
