I had the exact same thoughts upon reading this article, having spent quite a bit of time in Japan. Businesses are liberally sprinkled all over residential neighborhoods, from bars, cafes and grocers to home electronics and repair shops. The density (and corresponding walkability) of Japanese cities is a big factor that supports this kind of development. The armchair economist in me wants to theorize that this might be a contributing factor in Japan’s exceptionally low unemployment rate: the ease of starting a micro business from your doorstep.
In Australia there'd be concerns about parking, neighbours would complain about customers dominating street parking, etc. Or if it was a small restaurant/bars there'd be fears of drunken louts as we collectively have an alcohol problem. It's a shame because there are lots of originally-corner-store-type properties which have been used as houses and shut off from the street. Ideally, they'd be quiet businesses like architects or studios or galleries or a classy deli or anything like that, but they're effectively boarded up and used as another living room by the occupants.
On the alcohol subject, the smaller the place, the fewer problems typically occur. Small bars rarely attract crowds big enough to have fights or get rolling as aggressive meat-markets.
AUS did not seem to have a crazy bad alcohol problem to this US person. I've not seen the summerys though(? when all the HS grads go to the Surf Coast, etc?). We'd go out on Fridays to the pubs near Melbourne and it seemed pretty ok. There was a guy with a ram though, that was strange.
However, my basis of 'bad' is something more like State Street in Madison after a winning home game where hundreds of people literally cannot stand up straight.
There is another quirk to Japan that seems to make this work so well, and that's how quiet it can be. I am sure there are exceptions, but for the most part even in packed areas with dozens of people walking the street, it is mostly quiet. I think low car density plays a pretty big role in lowering the the overall sound levels, but there must be more to it than that. It was surreal at times.
Cars are incredibly loud, as are delivery trucks. Both tend to be smaller in Japan, and there is a much lower car density in particular in most urban areas.