The address system works fine because it narrows down the location by ward (ku), area (cho), block (chome), and finally house number. That's all right if you're walking around town trying to find a place, and that's also perfect if you take public transport.
However, if you're driving, things get a little confusing, don't they? For example, how can you tell someone how to get from Ginza 5-12-8 to Nihombashi 3-14-7 if you don't use street names?
更新1:
I also wonder how online driving directions like Mapquest and such work in Japan.