[po]

Two important side-effect of this:

First is that it drives people to head home earlier, and then they often stop at a second place in their local neighborhood. I honestly think part of why there are still bars in the smaller neighborhoods outside of Tokyo is because of this. You can feel a bar empty out around midnight, and the people who stay behind are all locals. In NYC, those people (the ones from NJ who had to catch the PATH at least) would be derided as "bridge and tunnel" folk, but here it's most people.

Secondly, it gives the subway a full 5 hours or so to do maintenance and repairs. In NYC, they were constantly re-routing trains during late night hours to do this kind of work. It is pretty disruptive for passengers and they come up with crazy workarounds like taking a bus between stations which really don't even make sense.

[zeroCalories]

I have used both systems too, and while the NYC transit system is a shithole, I greatly appreciate the 24 hour service. There are also usually alternatives available for when things get shutdown.

[Symbiote]

Many European cities compromise, by running trains overnight on Friday and Saturday nights, but using only buses on Sunday-Thursday nights.

(Tokyo seems not even to have buses running at night, which is really strange.)

[midoridensha]

No, the whole public transit system shuts down sometime after midnight. At that point, you can either walk, ride a bicycle (there are rental/bikeshare bikes available), or take a taxi.