Maybe I'm too sarcastic and disillusionned about our modern world, but if it's true, I see that more like a deliberate strategy.

"Who? We, censoring games?? Oh no no no, not even once! But... it's not our fault if japanese development companies can't comply to our famed quality level because they can't write in English... What a shame that because of that, we can't quality check the games and thus can't release them worldwide..."

I hope I'm wrong, because it would be really twisted.

How did that come to be? Did they get bought out?

People think it's because the Japanese branch basically botched the PS3 while the American one helped regain market share later on. In addition to how well the PS4 is doing (although also thanks to enormous help from the competitors), this is how the power shift came to be. You can be sure that there are enough people in the Japanese branch that aren't happy with this situation. Nothing they can do anymore though, especially with consoles becoming less popular in Japan.

As written in the first post, this is also for Japan-only releases.

I don't see how it invalidates my theory if the western headquarters are dictating the policy now

LaPeureux, 'sat you?

Because it would make no sense for them to "say" or "think" that when the games aren't even released worldwide.

It would make no sense, but you don't realize how some people are control freaks, even on subjects that don't affect them directly.

Which i a problem we have in the west. What i find amusing to me the most is the same people that say the world hates us for imposing our morality on them via colonization are now trying to impose their morality on the rest of the world, and steal people (the most valuable resource) from the 3rd world via immigration. You'd think we'd've learned our lesson by now, but we haven't. Not everyone wants what we want, in our own countries, let alone abroad. Let the titties bounce.

Appearently Sony is getting even worse now (I haven't found an official statement from Sony yet, so there's a small probability of a bad translation or a mistake but the news seem legit):

-All communications and submissions between game companies and Sony are now filtered through their California branch, in English -- not just the censorship, any complaints about the censorship now have to go through the team performing the censorship.
(it was just the screening process before, which is already bad enough)

-Visual Novel porting to Playstation is now prohibited outright, those that were already in production before the policy change happened will be allowed, but must be heavily censored.
(it was a case by case decision before)

-Sony has ended the policy of allowing publishers to use the "local rating system" but instead must use the full "Western Standard." In other words, instead of allowing Japanese published games in Japan to use the CERO rating system, all games on Playstation must adhere to ESRB, no matter where they're published.
(I don't even need to explain this one, do I?)

Indeed, well put my friend.
We want to shoot them in the head, and blow them to bits, not make love to them.
Long live the decency and morality of videogames.

Back then Japanese games were inspired by western games. Wizardry inspired them, Ultima Underworld too and others.
But now they want to mimic western games for western customers.

Looks like they soon will be the same bland boring western self-playing easymode AAA blockbusters and no more something fresh compared to western production.
Pity.

Hopefully nudges Japanese devs towards the PC.