I have driven (well, been driven) as far as Tokyo-Nasu and Tokyo-Fukushima. Not anywhere close to the full length of Japan, but pretty much a day's drive. I wouldn't say there's anything wrong with doing this, it's pretty much like doing the same thing in the United States. It really just depends on what type of travel you're looking for.

Overall I'd personally rather take the train, which is faster and more relaxing. But you obviously can't stop and pick up an ear of grilled corn at a rest stop on the train if you feel like it, or turn off and go to Nasu Highland Park on a whim. You have to plan a lot more precisely on the train, whereas you can wing it if you're driving.

You also can't really be loud and obnoxious on the train, which you can be in a car if you're in that kind of group.