One reason this makes sense is that buildings are crowded so closely together. The dust and paint from a project would threaten nearby structures and public areas. And this is a city that washes its sidewalks by hand.
Something else must be at play here, hoewever. Even large building projects, set off by themselves, are completely wrapped until finished, apparently. For example, we passed this site on the train the other week. Imagine the additional expense this cocooning involved.
Maybe the construction wrapping is as much a bow to visual aesthetics as anything else. Rather than show something to the world that is unfinished, messy, or unsightly, they present a barrier that sends an acceptable signal: work in progress.
Thinking about this, I remember my experience bringing gifts to my co-workers when I first came here (an important ritual). I was told that the wrapping was as important as the gift itself. Thank goodness I had Cindy's help. Sure enough, when the gifts were passed out, there was much admiration of the paper, and how each present was wrapped.
So, maybe building wrap in Tokyo is more than just a dust shield, and more than just a visual screen. Perhaps it even functions to heighten the anticipation of something new--like a present under the Christmas tree.