Yes Thailand is cheaper, but English is most certainly much more widely spoken, especially in tourist areas, which makes it easier for most folks (despite its being more dangerous, full of scams, polluted etc).

I was surprised at the poor level of English at even my hotel, a 5 star business hotel in Akasaka, though the staff was very kind, helpful and let me work on my Japanese (I think I had 10 phrases at the time, now its down to 2).

But the OP's post and some of those following is one of many views of why I need and must go back to Japan and explore the country more and I am resolutely determined to do so. Plus those girls...

As for travelling on a budget, accomodation can always be found (ie. planning in advance as gates_2 so rightly points out), but budget food can be found just walking into random restaurants and bars. In Tokyo (the only city I have been to in Japan) I ate Udon and Gyoza for 6 USD (a long story - the waitress was Chinese and thrilled to speak Chinese with a funny foreigner in Japan so she comped a lot of beers), but the next night with my colleagues we spent god knows how much on a feast of sushi, sashimi and other things. The following night was with my boss who wanted "something cooked" and thus was 200-300 USD/pp at a Teppanyaki place in Roppongi, followed by my lunch the next day of 8 USD Tonkatsu.

FWIW - I think language can be a major barrier that a tourist/short term visitor can easily overcome with body language, a smile and some willingness. Yes getting official things done will be impossible, a bunch of girls may run away from you and you might have to play charades at the supermarket to say you want hand sanitizer and not soap (this actually happened when I first went to China) but most of these issues will not come up for most tourists.