"what makes Japan's transit card system (IC cards) so unique compared to the West"
Actually other western transit system cards are similar to Japan's. For example in Paris the transit passes (Navigo cards) are stored-value systems and hold a record of the last few scans (three I think). You can also read them with any NFC smartphone and see what's stored inside. The tap at the entrance of a transit vehicle is near instant as the reader doesn't need to interact with a backend since everything is stored on the card itself.
Yea but the Japanese IC card system has complete interop between all transit systems run by completely different private companies. So you can hop on a train from one city to another and then hop on a bus in that new city on the other side of the country all using the same card.
And a good chunk of vending machines in Japan accept the IC card. Sometimes even food shops a step above vending machines.
Japan has lots of IC cards in various regions, and they have spent a lot of effort integrating their system. Unfortunately some IC cards like Kumamon decided to opt-out due to high maintenance fees.
AFAIK, you can go through up to 4 different company networks once you enter paid-area. Beyond that, you'll need to do the override settlement (乗り越し精算) with the help of station staff.
Actually other western transit system cards are similar to Japan's. For example in Paris the transit passes (Navigo cards) are stored-value systems and hold a record of the last few scans (three I think). You can also read them with any NFC smartphone and see what's stored inside. The tap at the entrance of a transit vehicle is near instant as the reader doesn't need to interact with a backend since everything is stored on the card itself.