i think many people have touched on some possible reasons, to which I would add::
Because there is very little regulation, it has become a buyer's market. If not for the unstated but generally accepted minimum standard to issue a working visa (of about 3,000,000 per year or 250,000 per month), the rates would be lower.
Now some people might think that it's an unattractive amount of money, but since there is no regulation to speak of except for the requirement of a university degree, and if not from a first language country of English, a certain TOEIC score-I think it's 730 or 650 I can't remember off hand, It is a fairly attractive salary for new graduates who want to travel around and experience life outside of their home countries. With a little bit of common sense and restraint, a new university graduate can have a year or two overseas and save about 500,000 - 800,000 yen
So for young kids who come from countries other than the United States in two or three years, you could pay off your university loans – which is not possible in most entry level jobs.
and so for a young person, it's a pretty good deal.
Furthermore, you are not from a northern country, it's a pretty good salary, and I have been running into more and more NNS with very good qualifications and a high level of professionalism.
So again I think that the reason the salaries are at that rate is because they are competitive and reasonable in light of the qualifications that are needed to teach at an English language school or business if you will.
I think some people look down at Eikawa (English conversation teachers) teachers, but I have seen some very good teachers at Eikawa, and some very poor teachers at other supposedly "higher levels".
Granted there are probably Eikawa teachers that are just in to much about, and I have seen and meet my fair share, but there are also some very good Eikawa teachers.
to wrap up and get back on topic, I think for some people the salary is sufficient.
I will add to that, while there are some stories about schools (chain schools in particular) taking advantage of English language teachers, for the most part Japan is fairly stable, and people generally get paid for working, and don't get shorted as a routine practice by their employers This is not always the case in other countries were native speaker teachers are sought.
cheers