And so it begins
This seems to be another case of technology surpassing law. I have a number of characters I've created (note the word created) and I pay to futher their develop on a monthly basis. These are my property, how they look and what they have is down to the time, money and effort I have dedicated to this hobby. If someone hacked into my account (even after I had taken every measure to make sure it was secure) then I would expect the company who runs it to step in and resolve the issue, if they couldn't I would consider whether I could take it further.
In reality it probably wouldn't get anywhere with our fuzz as they don't undertand that these virtual figures are creative property that has had in some/most cases money invested in them.
I agree with previous posters though, you give your password away and your case is severally weakened. Whether the sentence is fair for the crime is down to the Japanese justice system, if 5yrs is what they usually give to cases of damage to property which is all they could possibly boil it down to.
I think there will be a growing increase in these stories, hence why the law needs to catch up with these issues.