Japanese are extremely risk-averse, and extremely safety-minded in general. It is helpful to keep that in mind when considering the "weirdness" of many things they do.
Add to this a strong sense of community first - which means that it is more important that you fit into a readily understood place in society, the company, etc.
A self-employed foreigner? We don't have a checkbox for him. His name doesn't fit into our kanji boxes. What if he doesn't take the garbage out in the correct manner?
It sounds ridiculous, but it's really no more than "that's not how we do things around here" you'll find anywhere, but taken to an extreme.
That said, I find most people to be quite kind and helpful. The system is what usually gives the problems.