It's not actually false, but you are also not wrong :-) I will explain. Japan has a very different agriculture system from most places I've lived in. After WWII a million people died of starvation. Japan had very poor food distribution practices in place and had been importing nearly everything. When the Americans blockaded Japan, they literally starved. Even when the occupying forces started to distribute food, it was impossible to get it out to the starving people.
The US occupation of Japan was remarkable in many ways and they made many laws which are still on the books (including the bizarre pornography laws that still exist here!). Japanese culture is such that people don't tend to question authority and so they will follow the law even if they think it is strange. Many of the really good laws in Japan were put in place during the occupation, but they are things that you would never be able to get away with in most other countries. The current agriculture system is one of those things.
What they did was mandate that designated farm land could never change designation. So it is illegal to build on farm land. They also made it illegal to sell farm land. The only time farm land is for sale in Japan is when the owning family dies out. The resulting sale has really complicated rules which I don't understand. The result of this is that all farms are small and they are owned by a wide variety of families. The modern factory farm basically just doesn't exist here (except up in Hokkaido where there is a lot more room -- and I think people are farming on non-farm designated land).
In addition to this, they set up a food distribution monopoly. This food distribution monopoly was mandated to distribute food locally. The intent was to have many, many small farms making many, many different products and to have very good distribution from the farms to cities -- because all produce is local. This created an incredibly robust (if inefficient from a price perspective) production and distribution system.
The third piece of the puzzle is that they made the import of all essential food products illegal. Although due to external pressures this is very much relaxed now, it is still illegal to import rice for anything other than glue manufacture, for instance (although possibly it is legal now for alcohol production... I can't remember). This allowed the distribution monopoly to dictate prices that would allow local production to continue.
This system works fantastically well. Many foreigners are skeptical (and frustrated with their inability to trade -- a fact that constantly amuses me given that it was set up by the US in the first place). However, I live in the country side. When I go to the grocery store the food in it is grown by my neighbours. They even write the farmer's name on the bags of produce (and even have a picture of them!) Some food is grown one or two prefectures away. A very small amount (like dairy products) is produced in places like Hokkaido. Only recently have I started seeing produce from other places in the world.
What has this to do with the topic? I'm glad you asked! Produce is picked fresh and put in the store that day or the next day. I know this because the JA (now a private semi-monopoly food distributor) is down the road from me. Anybody can go in and watch them work (farmers are going in an out of there all the time).
So when you have tomatoes, for example, they are red when they are picked. They go to the JA, sit for a couple of hours and then go to the store. The store holds produce on average for 2-3 days, apparently. Fruit is sweet because it is ripe. It also doesn't last. Many foreigners are surprised when they buy a basket of strawberries and it is rotten in 2 days.
So even though Japanese farmers choose to grow larger varieties, the produce in the store is dramatically better than the produce you normally find in grocery stores around the world.
The other thing is that fruit and vegetables are expensive. Normally I think it's nearly twice as expensive as what I was used to in Canada. What this means is that for fruit production, they often limit yield. Not only that, but they do things like manually tie paper bags around fruit when it is growing so that it does not get eaten by birds. When they grow melons (one of the specialties of my area), the farmer gets up every day and turns them so that the sugar is evenly distributed through the whole melon (if you don't do this, the side that was nearest the ground is dramatically sweeter -- you can test this yourself by cutting a melon in half and tasting it blindfolded). Production is very, very small and prices are very, very high so they can do this kind of thing that would be crazy anywhere else.
For the very best fruit, the farmers charge insane prices. The best apple from a crop of apples will be sold for upwards of $10 US -- for a single apple. Melons can go for as much as $100 US. A perfect bunch of grapes, picked at the perfect time can be $20.
I have friends who own businesses and thanks to the gift culture in Japan, they often receive these super-fruits from their farmer customers. Since they receive more than they can eat, I sometimes benefit from a re-gift (also part of the wonderful Japanese gift culture). I seriously have never eaten fruit like this before -- even from a home grown garden. These farmers are professionals and it shows in their work.
So you are correct, but are discounting the impact that the Japanese agricultural system has on the produce. It would be interesting to see what would happen if the Japanese people would get over their obsession of big fruit. I can't imagine how delicious they could make good varieties.