You say this in past tense, but BYD's kei car won't be released until later this month [1]. It remains to be seen how well it will sell. I think they are expected to sell maybe 5,000 units per year initially, but obviously they are looking to expand sales over time.
And what's wrong with kei cars? They are inexpensive to buy, fuel efficient, easy to park, inexpensive to maintain, are shockingly roomy inside, and have practical features like sliding doors. They aren't the fastest or most luxurious cars in the world - but as a tool for getting around they do their job very well.
The government also provides strong monetary incentives to drive kei cars in the form of lower taxes and inspection costs, which is another reason they are so popular. That's why the BYD Racco is kind of a big deal - they are the first non-Japanese manufacturer to design a car that complies with kei car standards. No other foreign manufacturers to date have felt it was worth the effort.