I wouldn't say the rest of the world is worse than Japan. It's just as bad (for post industrialized countries as a comparison. I don't count countries that are not on the same level of economic or industrial status. As such, countries like China or Vietnam don't count, it is still an industrializing country).
I can name quite a few things that can be troubling in Japan.
1. Government corruption is number one. They can pretty much choose who they want in power, but put them in positions of power, beyond the "voting" thing. I mean, why else would TEPCO, to this day, still not be required to clean up their mess.
2. Mafia can operate out in the open, and quite legally. I mean, they are disguised as legal companies, but everyone, and I mean everyone, knows they are a Yakuza group, doing the usual mafia stuff.
3. Legal/Illegal prostitution. Technically its illegal, but no one really enforces that law there, unless you are underage. But I think all countries have prostitution issues.
4. Things they have that all other countries have: racism, discrimination, gang violence, rape, murder (except that if you are the son of a politician, you get off free, even if you have killed and eaten a prostitute. In fact, you get to go on TV shows and talk openly about how you killed and ate a prostitution, because screw the rules, your dad has power). Interesting fact about rape in Japan. Almost no one reports it. Its considered a social shame on the victim if they get raped. So although its "lower" than other countries, it is actually much, much higher.
Oh yeah, and Japanese discriminate against other Japanese people (Burakumin if you wanted to know). In the US, you can sue for that. In Japan, lawsuits rarely do anything in these cases. So the Japanese are free to discriminate against whoever they want.
5. Oh, and many of the older generation, especially most politicians, refuse to accept Japan's war crimes, though I think someone already said that. Anyways, they want to make it so that they rewrite history to the point that it didn't happen. No apologies made. Ever. Hence why most of Asia still hates Japan. This exists everywhere, but in Japan, those people actually have power in Japan (they are politicians, kind of power).
6. Bullying. Asian kids are the worse. They bully, hard core. Its even worse because most teachers ignore it, or become part of the problem. The school acknowledges it, but they don't ever do anything. Yeah, every single bully thing you have ever read, in any manga or manwha is 100% real and not made up. The authors usually take that from their or their friends/families own real life experience. I've been to most Asian countries, and have seen bullying. If you get chosen as a target of bullying, it won't ever end until they get you to commit suicide (most common bullying phrase is to tell them to go die). At which point, the bullies win. You have no one to go to, most people don't care, and you can't tell your parents because they can't do anything. Soon your friends leave you because, they too are afraid of getting bullied as well. The country that comes closets to Japan with its bullying problem is probably Korea.
7. Social stigma instead of individual stigma. This is more of a cultural thing, but I believe it is part of Japan's problem. If everyone ignores it, then it becomes accepted. If one single person tries to fight back, that person gets outed. Having social stigma isn't bad in itself, but it leaves out the fact that people don't "regret doing bad things" if they don't get punished by society for it; and with Japan's current youth society, it exacerbates the bullying problem.
8. Rampant sexism and sexual inequality. Just for comparison, Japan is way more sexist than the U.S. or most other post-industrialized countries. And they have few laws against sexism and sexual discrimination, when compared to other countries. No pregnancy laws. If you get pregnant, you are pretty much forced to retire and become a housewife. So a woman can barely have a career and family at the same time. That isn't to say its not bad for men. The things that can discriminate against women have a indirect affect on men. In that it puts so much pressure on them to succeed and take care of their families. This would lead to higher stress rates, and whatever comes after. And women pretty much HAVE to wear skirts at work (I just think that is bullshit). Its ingrained into their corporate culture, only few companies let them wear other stuff. There is more, but I'm too lazy to say it.
9. Legal discrimination against foreigners (in that there are few to no laws against it). Also they are unreasonably afraid of foreigners. I guess this is common in other countries, but I don't know, I don't watch sensationalized news enough.
10. Their debt problem is way worse than the U.S. At the very least, the U.S.'s debt matches our GDP, but Japan's is far past what their yearly GDP can recover. Japan has the world's worst debt problem. Second only to Greece, but that's another story. This has more to do with economy than society, but I just like talking about it for no reason.
Well that concludes my essay on Japan's faults, within adding any citations, since most of this is known or can be easily looked up. I don't mean to say I hate Japan, or think its the worse country. This is just to let people know that Japan is as bad or good as every other country out there, beyond the rose tinted glasses of what the manga and novels about Japan present. I sometimes think people praise Japan too much, but then again, the grass is always "cleaner" on the other side. Personally, I would like to live in a country like Japan for one reason, clean public transportation, though it would be better if it didn't have as much people. If you feel like disputing my unsubstantiated claims, feel free.