having worked in Tokyo and been around Japan a few times Wayne, I would not consider it a cheap holiday destination in all honesty! Cheap flights do not lead to cheap holidays, and the JR rail pass - while a good bargain in the long run - are not cheap either - when it can equal to about 4-5 international flights within SE Asia via Air Asia. Japan is not a place where you can book a 5 dollar bus ride to another town, walk around and find a 5 or 10 dollar hostel or bed&breakfast and crash, then go out for a 1 dollar meal around the corner later.
you can see more of the world/Asia at 1/3 the price than being relegated solely to Japan, unless you want to catch the 40 hour ferry rides to South Korea or Shanghai and even those arent cheap. One of the major problems of being a budget backpacker in Japan is the lack of cheap alternatives to head to other countries. Only this year Air Asia has opened new routes from KL to Osaka and Tokyo but at an average of 200-300 bucks for a one way trip, that easily equals a hopping from Denpasar to Jakarta, to Saigon and to Bangkok for roughly the same price.
hostels arent always about shared facilities and shared rooms. For example, Mom's Guest House in Siem Reap, close to Angkor Wat complex is only 10 dollars a night including free breakfast in the morning - with a massive and clean bedroom and decent bedroom, you dont share it with anyone and is lockable, or let the staff hold onto things for you. Before anyone goes anywhere,or even to another city in their journey, it really pays to research ahead to save some money and hassles
before you go to a new city search for travel tips and info here -
www.wikitravel.com
when looking for cheap accomodation -
www.hostelbookers.com - they only take 10% payment deposit, and the rest payable when you arrive, great for when you suddenly change plans or cant make it and only lose a few dollars.
and dept of foreign affairs website is great for travel warnings too for dangerous hotspots