A lot of people here and on SRK are talking about Evo Japan like it's going to be the end-all tournament, but on Japanese message boards, there is a lot of negativity and xenophobia towards the event. Japanese don't seem to think that an American-style event run by Americans is a good idea because it won't be catering to their player base, the sentiment is that its purpose is "for gaijin only".
Unless KSK is fully on board for the event pushing it as his own, I am seriously doubting full Japanese representation for this tournament. Not to mention, next Spring the arcade version of Super is already going to be around and if there's no console update by then, they won't want to be playing console at all.
Moving the event away from SBO was a mistake schedule-wise, but apparently, this was a demand of Capcom Japan who has financial stake in SBO. C'est la vie.