I don't think that's fundamentally different from the US model.
While some countries have general funding calls where individual PIs can request funding for basically anything, the US model is based on large decentralized projects. Some academics spend a few years at funding agencies, identifying topics that could benefit from focused research. Then the agency issues a funding call, inviting applications from PIs who believe they can contribute. With some agencies such as NSF, this structure is more nominal, as individual grants are usually too small to hire permanent staff. But others such as NIH award larger grants, which make hiring professional researchers and support staff possible.
The fundamental issue with goal-oriented research is that it will narrow your vision. Topics don't get funded if there are no reasonable expectations that the idea will work and be beneficial. But that leaves the academia in an awkward position. You want topics that are promising enough to get funded but not so promising that the industry will also pursue them with better funding and higher salaries.
Goal-oriented research needs to be balanced with curiosity-driven research. Research focused on things the researchers find interesting, without any expectation that it will be beneficial to someone. Most of the time it won't be beneficial, but occasionally you get unexpected breakthroughs.
I'd say it's implicitly a result of the Japanese work model, not academic model.
Employed until retirement kind of hiring was the norm in Japan, with the work over life focus meaning many companies saw their peers more as an tight knit fraternity rather than the dry "strictly business" hiring in west.
So someone with known track record of being diligent and hardworking was often given more chances, even if his work didn't immediately produce result.
You're right that it's not a good one in the sense that for majority of the cases this just leads to bloat and unproductive members sticking around. But many innovations, academic or industry, in Japan, came from people being measurably bad/average in productivity, given a chance until they found their breakthrough. (entertainment industry had a lot of those)
While some countries have general funding calls where individual PIs can request funding for basically anything, the US model is based on large decentralized projects. Some academics spend a few years at funding agencies, identifying topics that could benefit from focused research. Then the agency issues a funding call, inviting applications from PIs who believe they can contribute. With some agencies such as NSF, this structure is more nominal, as individual grants are usually too small to hire permanent staff. But others such as NIH award larger grants, which make hiring professional researchers and support staff possible.
The fundamental issue with goal-oriented research is that it will narrow your vision. Topics don't get funded if there are no reasonable expectations that the idea will work and be beneficial. But that leaves the academia in an awkward position. You want topics that are promising enough to get funded but not so promising that the industry will also pursue them with better funding and higher salaries.
Goal-oriented research needs to be balanced with curiosity-driven research. Research focused on things the researchers find interesting, without any expectation that it will be beneficial to someone. Most of the time it won't be beneficial, but occasionally you get unexpected breakthroughs.