There must be legitimate theories as to why their culture is like this in modern times?
I think the most legitimate theory is that it's a media problem, and is not unique to Japanese culture. Meaning it's sensationalist, sex sells, asian cultures are "other," (and the more "other" the better the story for the media) and you have a delightful recipe for some a completely orientalist quagmire.
I mean, reread your paragraph. you are blaming the japanese culture for this (even as you're backpedaling, trying to give yourself cover), rather than blaming the media portrayal and media sensationalization that is going on. We ignore the media portrayal because when we click on the link or read the story, we become complicit within it, we are guilty too, our brains don't like that, so rather than blaming ourselves for being part of the problem, we externalize the problem onto the japanese or their culture and make sure they are blamed; they are guilty.
let's flip to the French. Michael Haneke made a film called the Piano Teacher, and the opening scene has her going into porn shops, into the individual jerk off rooms in the back, and grabbing used cum tissues out of the trash pressing them into her face, and inhaling, smelling them over and over while she masturbates.
But the media doesn't see that, or Funny Games, or Amour &c and go, "Oh my fucking god, what is wrong with these sick french fucks!" the way the media does with examples like the above.