I believe they are expensive because:

* They have a captive audience and no competition inside the security area in the airport - people who want to sleep between flights, but can't/don't want to go through passport control, customs and security to a hotel,

* They have to be cleaned between each visitor, many times per day.

Hotel rooms are $100 a night, yet appartements their size aren't nearly as expensive on a monthly basis.

I could see capsule rooms going for $100 a month.

Yeah, I have a friend who just moved to Japan (and he's lived there before) who told me the same thing.

Some friends and I ate lunch with him the day before he left, and he mentioned that living in Japan isn't too expensive if you know where to live, and he knows how to only pay $300/month in rent. So I asked him if he meant capsule hotels. He told me what you said, and then he said that he meant hostels. Hostels are dirt cheap, even if you pay extra for a private room. You can probably live in Japan for less than $300/month rent if you're willing to sleep in the hostel's common area.