I lived and worked in Japan for 6 years, returning to my native Scotland almost 2 years ago, after struggling for the few years after the M9 quake (lived in Koriyama, Fukushima prefecture and lost my job after the quake).
We bought a new Suzuki Wagon R Limited back then, and I loved that car. Its apparently small outward appearance is deceptive; inside, there was loads of space - a high roof height, and when you folded down the rear seats you could comfortably fit items such as chests of drawers, fridges, and the like.
The engine; 0.6 litre - but that was augmented by a turbo, so there was plenty of power available, plus it sipped fuel. The automatic gearbox provided 4WD in first gear, which was awesome during winter - we lived in rural parts of Fukushima and the roads frequently iced over. Once during winter we went for a drive up a mountain road covered in about 3 inches of fresh snow and made it to the top of the Katasoniyama mountain because of the 4WD+studless tyres. Our Wagon R Limited also had niceties such as aircon, electric windows, and a minidisc(!)/radio.
All in all, a fantastic vehicle, and I wish we had sent it over to Scotland when we moved as the equivalent Wagon R's available here are made in Europe and just aren't the same standard of equipment and features, sadly.
The silly thing about the move by the Japanese government is that these Kei cars are an ideal solution to crowded cities as they require less space on roads and for parking, as well as being (or were) an extremely economical choice.
As others here have commented, I suspect there has been lobbying by the makers of large gas-guzzlers to make Kei cars less desirable. I think this decision by Abe's government will inevitably impact Japan's struggling economy - crony politics is notorious in Japan, something which contributed to the design and layout flaws of the Fukushima Dai-ichi nuclear plant.