This is just like Japan IRL. A couple of years back, Nick, Niero and I were in Kabukicho, Tokyo's red light district. We attempted to enter a pretty awesome looking hostess club. All pink and shiny. A finely dressed (high-end suit) Japanese man and his pet bouncer stopped us. The man held up his arms, making an X out of them. He said to us in perfect English:
Japanese only, please.
I think Sega is giving us the same story with the western release of Yakuza 3. IGN spoke with Sega, and it turns out that the in-game hostess clubs have been cut out of our release. The Japanese quiz show game was also cut.
The Sega rep assured that the story was not affected by removing these parts. Thankfully, the strip bars are still in there, and you can date the hostesses, so it's not the end of the world.
I don't think the cultural differences are enough of a reason to cut the hostess clubs. We all know what they are, right?