Too many things to respond to at once, but after all that passed, it is amazing  that Americans did their eery best to imitate Japan's mistakes. When I think of NINJA loans, or the laughable cov-lite terms private equity buyers could obtain  with but a veneer of equity - spreads that themselves were dwarfed by the routine fees swallowed by the manager, I am reminded of the heady days on the Tokyo bourse with their absurdity.

But first, I think it is important for people to remember that the Japanese bubble was squarely a Japanese affair. The credit extended was Japanese. The borrowers were primarily Japanese. The punters and specs were all Japanese. The gaijin were peripheral. I'd argue their presence didn't matter. Their profits were rounding errors, and for the most part were just opportunistically gaming ludicrous structures that existed [and persisted!!] in a way they only could in Japan." Yes, they helped distribute warrant bonds, but didn't underwrite a single issue, and rather than goose the market further, the warrants served to allow foreign portfolio managers to reduce their risk to an overvalued market. And when the arbs did the same, it was the Japanese domestics who bought the cash equity sold short as hedges

Second, "We" did dance on their heads imploring them to goose domestic demand following our "bonnie situation" caused by our little 1987 experiment with portfolio insurance, and they relented, against, I understand, the prevailing BoJ sentiment, probably for all the reasons you cited. But perhap there is another way to see it. Low rates were the proverbial icing on the cake. Things were percolating awesomely, anyway, before the arm twisting on rates. When free money actually arrived in Japan, the combination with prior frothy momentum meant a further orgy of capex (why not - capital is "free" with bonds+warrants), construction, and speculation. Like the hawkers to cash-strapped municipalities of strategies leveraging CDOs to fund their deficits because they could (however badly it ended), japanese companies borrowed free money because they could, mis-allocating it in the most absurd ways, adding unneeded capacity, launching new subsidiaries to vertically integrate in crowded markets, building unnecessary towers, yet more real estate, golf-courses, hotels, expanding cross-holdings,  just punting the market and bell-ringing forays into overvalued trophies in UK & US. NOT so much like in the US where a larger share was privately appropriated via fraud (though this existed too) but misallocation out of sheer mis-extrapolation of what made financial sense with rates near the zero boundary. And these are the costliest mistakes - Mistakes that make you pay 75 cents on the dollar too-much for a property.  Mistakes you never recover from, and burnish indelible lessons and fear upon one's grey matter. And all this stretched the boundaries of the normal and sustainable economic activity and then went way beyond. It wasn't artificial - it was "real" in the sense that it happened. But it was a rare occurrence in large monte carlo simulation. The confluence of things that bred the scale of the activity were numerous and varied,  both internal and external, financial, and behavioural, but a fluke, and not likely to be reproduced in japan ever again. Ever. The bubble was the confluence feeding back recursively as happens in bubbles, until "The Wafer-Thin Mint" moment.  But perhaps the mistake of observers  is to compare subsequent economic activity against an impossibly-steroidal, benchmark, one against which they will always be disappointed. To wonder why they didn't return to robust growth (in comparison to The Top, might be turned on its head to ask, why, following the POP!, output didn't quickly shrink 15 or 20 percent??  They were gripped by a maniacal overconfidence that took hold of them: they built, worked, invested, and relatively-speaking even consumed in a way that crammed a decade of growth into a much shorter time-frame, coinciding with the peak of the demographic bulge. It satiated demands, seemingly once and for all and scarred them in process, before they went headlong over the the demographic cliff, from which there appears little imminent prospect of return.