Until Japanese have an economic reason to learn English, they will continue to participate in the educational equivalent of get-rich-quick schemes instead of actually getting good. It's a great example of the "Galapagos syndrome".
There is English education at school, but it is based entirely on rote repetition and exercises instead of y'know, understanding the language. There are "English Conversation Schools", but they are mostly scams whose goal is your continued participation, rather than having an end goal of comprehending English.
There is a very strong economic incentive to do well on university entrance exams - they pretty much determine the course of a Japanese person's life - and thus both schools and outside tutoring focus on teaching students to score well on the English section of those exams, to the exclusion of learning to understand or speak English.
Similarly, it can be beneficial to one's someone's career to get a high score on TOEIC, so adult classes prioritise teaching people to get high scores on TOEIC. The "education" system is extremely well aligned with the economic incentives.
I spent 4 years in Istanbul and paid for Turkish classes at a popular English school chain. Their English was bad, and all the classes were full all day.
I believe that reason is increasing at a higher pace in the last few years and will only keep increasing. Japan continues to bring in more foreigners both for work and as tourists, and their usual tactics of dealing with foreigners and other "problems" by cutting off the nose to spite the face (Gion, Mt Fuji Lawson, Shibuya Halloween etc.) won't work forever.
Do you think English language conversational AI tutors could have a positive impact on a nation like Japan (which tends to be a little more introverted)?
I was a teacher at an English Conversation School, more than 30 years ago, and I think that there is more to them -- or at least there was.
Where I lived, this was one of the few places to interact with a foreigner and practice English (often before going on an overseas holiday or work contract). Even better, it was a safe and controlled environment.
One of the crucial hurdles for Japanese people learning English has always been a lack of confidence and fear of looking foolish in public.
It didn't do much for English ability, because how could it when the class is only one hour a week?
Many of the schools were get-rich-quick schemes, as you say, but that doesn't mean they didn't provide a valuable function, even if they didn't contribute directly to English ability.