Not that I disagree with you regarding technically better arcade titles but the state of arcades in Japan is far from fantastic, especially for traditional games. We're seeing more and more card and medal based games entering the market with the actual size shrinking last I checked.
SEGA for example had 477 arcade facilities in 2005 and now have 198 centres. I'm not sure about the overall volume of them (I think I recall seeing it in one of their stock reports) but I am pretty sure they've declined considerably too.
I mean it's not videogames land like it used to be, but 198 Segas is still very impressive. Each of them to the very least has 4 racing cabinets (two Initial D's and two Wangan's), usually 8, plus the 8 immense cabinets of the currently popular mech game (don't know the name of that one), among others. For those unaware, these are not 1-level shopping mall centres, and Sega is not the only company, neither.
Anyway, the point is that if Daytona 3 is getting a Japanese release, then the competition it will have is going to be much fiercer than only the western crap we are used to playing. With the graphics shown in the video, Daytona 3 would be the worst looking racing game in Japanese arcades, that not because of the graphics themselves but it just would look so bland in comparison to the games sitting next to it.