Travel Costs ... Why so much more?

I flew to Narita from Boston, Massachusetts on August 2, 2007 came back on September 6, 2007 ... at the cost of $2,250$ ... I am looking to go back this summer August 1, 2008 - August 30, 2008 ... and the average cost listed [on travelocity, same site I bought from last year) is 1,550$! ... is this because I am looking so early? (bought in March last year) ... or did it suddenly jump 300$? I find this ridiculous.

It is quite possible there are specials for tickets bought more than 6 months in advance, yes, especially for flights during the summer high season. The day of the week you leave/ come back on can also affect the price considerably, with weekend departures/ arrivals being more expensive than weekdays.

If you really want to know the reason, contact travelocity or the airline involved- I doubt it's anything to do with Japan itself, the same most likely applies to other destinations.

Paid $2,250 in 2007? Not, $1,250? Online UAL.com shows $1,691 to $1,786 for your 2008 dates. If you book early and if the airfare drops later for the same flight schedule some airlines like UAL will give you a travel credit certificate for the difference for use towards a future flight within one year. I notice that airfares for 2008 are on the higher side due to increased fuel cost plus less discounting. As for less discounting, the airlines doesn't seem to be competing aggressively as in the past and therefore post higher fares.
Like any other business, airlines are trying to get the highest airfares they can get and they change their airfares on a daily basis. Sometimes the best fare can be had if you book early since the airlines want to sell as many seats as they can earlier. On the other hand, if the flight is not getting filled based on their planning schedule, they will offer a small number of discounted seats about 3 months or less before the flight date. So, to get a lower fare you need to periodically check airfares before your critical date point.
If you do your fare search online, select Flexible Dates instead of by Price to see if you can get a lower fare by moving your flight dates forward or backward a few days. As Sira said, the day of the week can make a considerable difference in the airfare. Some airlines post periodic Specials at reasonably low fares to Japan, especially to Narita. If you're lucky, you may catch UAL's special fare. Also know that some airlines post fares lower than UAL's Specials.
Keep monitoring the airfares and I'm sure you'll find a lower fare.

Ah, I see, you meant to say $1,250 and put $2,250 by mistake, so you mean it is more expensive this year- I was a bit confused by that.

One of my reasons still stands- the day of the week. Another reason is quite possibly the fuel surcharge- is it included in the price? I'm sure you heard that at New Year oil reached $100 a barrel, the most expensive ever.

Aviation fuel is made of oil of course, so when fuel prices go up, that extra cost is passed on to the traveller. I am now 32 and have been travelling since I was 20, and prices just go up and up every year- I am not surprised by that kind of jump at all.