I think one of the reasons is the net. Japanese people are busy using the Internet, especially the younger generation. They don't have enough time for reading books. If people don't read books when they are young, they will not read books when they grow up.
Why do American people read books more than Japanese people? I think school education is the reason. Students in the U.S. have to read lots of books for preparing class but Japanese students don't. What do you think of this?