Western FPS sell fairly well, generally receive positive reviews, and have a not-insignificant fan following in Japan. My guess is that it's a combination of the following: Developers who make a lot of games "for export" (e.g. Capcom) usually stick with the genres and series they have the most experience making. The developers who make games for the domestic market focus on genres that are more popular at home.
Also, the motion sickness argument sounds dubious, and anecdotal at best.
Also, the motion sickness argument sounds dubious, and anecdotal at best.