pipokun,
Yes, a lot of what you wrote about qualificatoins for a card are valid. I won't bother to look deeply into my friend/coworker's situation, but I can easily tell you this:

He is not a financial risk.
He speaks very good Japanese (and filled out the application himself in Japanese).
He is "clean".

He called the company directly and asked what the deal was. They wouldn't give him a clear answer and even defended the point he politely asked about whether they rejected him because he was a foreigner. They simply said they couldn't say what their reason was, so he had to live with that. He doesn't like it, but it is weird.