The sense of entitlement works both ways between people and government.
While this is true, I don't think your comment applies particularly to this situation. There are many ways to apply that comment and I'm not sure how you mean it in this case.
I think people are pretty entitled to be supremely ticked off when tax money is wasted (and I would say making tennis courts the public can't use with public money is a waste and that is a small example) and then to say you need the money after it was wasted is unbelievable. I don't think that is how you meant entitled.
What were they thinking? Are they just power drunk?
I have NO idea. The Prime Minister, Fukuda, has an approval rating of 20%. All I can wonder is what that 20% are thinking. Maybe that 20% benefits from the Graft-Gravy Train that has been running. Maybe Fukuda is doing some good in other areas I don't know about.
Here are a couple of links to articles. I wanted to get more stories about the usage of the money but couldn't find many. I need better keywords. The Japanese news articles I found were considerable tamer than the news broadcasts I watched.
A general information on the situation:
An interesting view from China.
A really good article that was in Wallstreet Journal Asia according to the web-page. This is really the best article for considering the stakes.
By the way, I made a few corrections to the above article.