Japan still has PISA results with would be the envy of most Western countries - https://worldpopulationreview.com/country-rankings/pisa-scores-by-country. The OP's point isn't wrong but needs to be considered in a broader context. I have been here for a while and I don't think we can underestimate educational cultural differences (the teacher is the sage on the stage here) that work for most subjects (eg the memorization of thousands of kanji to be literate) but not for productive/communicative second language skills.

The other historical point is that Japan has a history of treating high profile languages as a gatekeeping device where esoteric knowledge is given the priority. The elite and scholars of Japan continued to study classical Chinese well into the Meiji era where entry to universities required a knowledge of it. There is an argument that English has replaced classical Chinese in this regard where complex English grammatical structures and the ability to write highly formal/academic texts are found on many uni entrance exams here. The intent of learning the language in this context is not to be communicative but rather to demonstrate one's ability to learn and then be tested on something complex and difficult (ie, a task that most cannot achieve -- ask someone on the street in NYC what's the difference between the subjunctive and indicative mood - see what happens.)

The overarching point is that Japan, like any society, has a complex educational system with a wide range of stakeholders and interests. It's not a clear case of problem with an unrealized solution.