Yes, it is disgusting. Why is this a question. Better: why are we pretending this is a question?
Much if not most of the world takes their shoes off when entering a house. It's not just the Japanese. It is the practice in Northern/Central/Eastern Europe, the Middle East, Ethiopia, India, etc. Besides, taking your shoes off allows your feet to relax instead of being cooped up inside a small, confined space for all your waking hours.