"East is East......."
One does not grow to love Japan. You either like it or you don't. It's in you or it's not. Plain and simple. Japan grows on you, not the other way around.
This may rub some the wrong way, but it is how I've always felt. I am always a little perplexed at why foreigners who come to Japan, a sovereign country in it's own right with it's own unique culture and customs, demand that Japan change their thousand plus years culture to suit their own thinking and culture.
To me it's absurd and arrogant. It is the product and thinking of a people who have been taught all their lives that their own culture and way of thinking is far superior to any of those on planet earth and that they are within their "rights" to demand that the country they decide to reside in change to suit what they are accustomed to so that they may not feel uncomfortable. But after living a while in Japan they will claim that the Japanese feel that they are far superior to other cultures and that this is wrong. Tell me, what country or culture does not feel that they themselves are far superior to others?
It's almost like being an invited guest at my house for a few weeks and demanding that I change the way I have lived all these years because you are used to living a different way or you will leave and/or refuse to come back. I say, "Good riddance," as you are a guest in my house ("country") and if you don't like it then leave and don't come back. I'm not going to change my way of living to suit you and how dare anyone demand that I do so. I would never demand that you change your way of life to suit my needs if I were a guest at your house for a few months nor would I expect you to. Well, sorry to disappoint you (not the OP). You are a guest in their house (country) and you must and should abide by their laws and customs no matter how "barbaric" they may seem to you. If discrimination towards outsiders is the norm then you either get used to it or you pack up and go home if you disagree with it and don't like it.
If you are thick-skinned and can understand the fact that you are in a foreign country and not your own then you may be able to survive there. If you are too thin-skinned to take a little ribbing from kids or the fact that you may get turned down for an apartment here and there, or that you will be asked for your gaijin card on a few occassions, or will not get that job, then you best turn tail and go home because Japan (and I'm sure other countries as well) is not for you and you will probably never be happy there. In fact, you will probably come to despise the country and leave with a bitter taste in your mouth only to bad mouth Japan on forums and BB's in the future.
Japan not only discriminates against foreigners, but they also discriminate against other Japanese as well. There are signs in bars and onsens that forbid anyone wearing a tatoo from entering. A Japanese landlord may refuse to rent his apartment to another Japanese just because he looks like a gangster, or has spiked hair and a ring or two on his/her face, or are too young, or is a college student. According to what I've discovered they base their refusals on personal experience. Granted, not all are trouble makers, but their own experience tells them the odds are that they'll experience what they have in the past.
Are they wrong? I think not because it is their land and their house/apartment, store, bar, etc, and who is to tell them who they should rent to and who they can't or should allow in? Why should a foreigner like myself demand that a Japanese rent me their apartment just because I am American and we don't do that in our country? Especially when their own experience tells them that many foreigners do not abide by Japanese customs, are noisy and dirty, wear shoes on tatami mats and generally do not abide by Japanese customs? It is those few foreigners who mess it up for all of us. But I completely understand the landlord's thinking. Also, I know that if I persevere I will eventually find an apartment or house that will be rented to me shortly. And, if I abide by their customs and don't trash the place or disturb the wa of the area, then the owner will readily rent to other foreigners in the future.
One must remember that Japan is not a melting pot of different races and cultures like Europe and America so they may not understand, or even care, why we call them bigots. I believe England was forced to take in Muslims, among others, and change their laws because they owned and dominated those countries. The Muslims and Indians, etc. were British subjects and could easily move to England. Therefore, England HAD to change their laws to accommodate what many saw as foreigners but technically weren't.
Japan, on the other hand, is a homogenous culture and it may take even more years for them to come around to the thinking of the "New World Order" with no borders and culture and accept foreigners with no discrimination. However, I do not think that will happen in my lifetime or two lifetimes for that matter.
Even
Maciamo stated in another thread that in Brussels there are signs on some establishments refusing entry to Japanese only, because many of them are unrulely. And I think he finds this acceptable. Are the Japanese demanding that Brussels change their laws and customs? Are they making a big stink about it? Are any Japanese saying that people in Brussels are bigots? Shouldn't people protest this discrimination as others are demanding of Japan? You will find discrimination against some people in every country in the world regardless of their laws, not just in Japan as some would have you believe.
Therefore, in order to be happy in Japan I feel one has to come to terms with the customs and culture and accept it for what it is while enjoying the many other aspects of Japan as the OP and others have pointed out. Sure they are bigoted in ways and discriminate against foreigners, as well as Chinese and Koreans born there. I don't deny that, but Japan will change on her terms not ours, and it is not up to us to change her. Sure, we may try, and many have tried over the past 50 years, but things are slow to change there. They are a bit better than in the past, but not by much. Japan will change when the Japanese people, including Koreans and Chinese born there, demand it and not before.
Rudyard Kipling once said, "East is East and West is West and never the twain shall meet." If you can not understand this than it's best you probably stay or go home lest you become frustrated and irritated with a country and culture that is not your own.
IMO the only way to be happy in Japan is, not to turn a blind eye and pretend discrimination doesn't exist, but to accept the fact that it does and that it is a foreign culture. Accept it for what it is. Warts and all. As others have stated, the positives still far outweigh the negatives for some and it can be a very enjoyable, rewarding place to live if one comes to terms with it.