Legalize is the wrong word I reckon. The better and more accurate word would be to regulate. To which I have mixed feelings of, because the community is giving up some control of the cryptospace and offering it willingly to the government. We already know how corrupt governments can be.
At least the Japanese government is better than the other governments. So far the regulation of Bitcoin and other forms of crypto-currency in Japan hasn't caused any serious issues to the Bitcoin users there. On the other hand, corrupt governments such as those in South Korea and India has tried to ban Bitcoin.