It's not that they're planning for complete annihilation from a massive earthquake, but there's bound to be some wear and tear when a relatively large one strikes every few years. Compound that with the absurd humidity and mold problem endemic to pretty much all of coastal Asia (trying to keep your house mold-free is a losing battle after a certain point and it's unavoidable) and the cost and effort of repairs far outweighs the ease of just tearing it down and rebuilding.
In the west, a 20 year old house is considered brand new. In Japan, 20 years old is bordering on junk territory. 30 years is junk and not worth the effort of repairs. You can search online and find 40 year old houses basically selling for pocket change since they're basically considered moldy death traps on the verge of collapse.
Now, though, Western-style homes built to withstand earthquakes are becoming common and they're expected to be a slightly better investment. How these houses fair against mold is something I'm not sure of.
A commenter below mentioned spirits accumulating in a house, but I've never heard of such a thing and it reeks of mysterious orientalism. But most people won't buy a house that someone committed suicide in or was murdered in. "Jikenya" (incident homes) are marked as such and sell for drastically reduced prices, if they can sell them at all.