They're starting to ban it. Japan's wheels of government move slowly, but they tend to be effective when they do move.

I agree. These go-karts are only street legal vehicles if the government agrees that they are street legal. If the government passes a rule that says go-karts are not street legal, they can be confiscated and destroyed as soon as they are spotted by the police. It seems that this problem could be easily solved.

It's happened on and off over the years, and at one point Nintendo took legal action against the business itself. It's just an annoyingly persistent tourist trap.