To be fair, you would have to compare to what happens if it were not legalized under similar conditions in the case of Japan, but I agree with you that the cases where prostitution is legal does not pave well for extending it in general if you care at all about the prostitutes condition (the same is also true for drugs, where many liberalization have totally failed).

I think the Japan situation is a bit particular, though - the Japanese society seems rather tolerant on extreme commercialization of sex in a way that is difficult to comprehend (and I am far from eeither puritan or American).