I believe you are under a certain set of misconceptions of Japanese history.

Ancient Japan was a country founded on pride and honor.

Ancient Japan came about through a series of gradually centralizing chiefdoms eventually consolidating around a single "Yamato polity," out of which grew the Asuka and Nara courts that are most recognizable as the beginnings of the Japanese state. Honor had nothing to do with it.

This seems typified by their practice of Bushido. In WW2, Bushido was embraced by warriors and shown in kamikaze and bonsai charges.

Bushido was an attempt by the Tokugawa Shogunate to create a codified standard for the samurai class to prevent them from causing trouble. It was greatly expanded upon after the Meiji Restoration and used as propaganda to indoctrinate its soldiers, many of whom were not of samurai blood. Kamikaze attacks and banzai charges (bonsai refers to the type of decorative tree popular in many countries) I discuss in detail here.

The elder Japanese men I've met esteem honor or at least the perception of it quite significantly.

Anecdotal evidence is unfortunately not rigorous, otherwise it would be appropriate for me to claim that I know many Japanese men who do not think much of "honor."

Today in Japan, we see oddities which can be very strange to western eyes. Their game shows do not reflect a culture I would expect to be born out of their history. There are vending machines with panties in them (mildly NSFW), and outwardly, seem comedic, no longer stoic.

These are fringe culture in modern Japan, much like we have fringe cultures in the US. Japanese culture for the most part remains very socially conservative.

So why the flip? Is this their 1960s US version of a sexual revolution, the affect of a post fascist nation, was there a leader who laid the foundation for this, or something else?

Japan was not a fascist country, although there is some discussion as to its nature as seen here.