I especially agree with Ann's points. I think it is really a matter of OUR attitude. If we don't lose the power to judge the trend of Japanese economical and cultural colonization or either globalization phenomenon, and decide our own direction, then I think we are still developing our own culture in a sense.
For Japanese's neo-colonization upon Taiwanese, I think the historical background indeed plays an important role here. Take my family for example, my grandparents recieved Japanese education, and they admire Japanese culture a lot naturally. They watch NHK channel, speak in both Japanese and Taiwanese together, and even visit Japan often. (When I was a kid, I didn't know Japanese and Taiwanese are two different languages.) Honestly speaking, I even don't have any hatred toward Japan for the war in China or the colonization in Taiwan for my family education. I appreciate many of their strengthes, such as their serious attitude toward their culture preserved, history study, working, etc.
However, it doesn't mean that I love Hello Kitty or all their fashion. I think Kitty is the most stupid thing I could think of actually. In my view, the problem of this crazy hit in Taiwan is because our young generation are lack of their own values for our education never teach them to think or judge. As the result, they borrow all the fashion from Japan and America mostly instead of create their own fashion. Major fashion plus peer pressure, undoubtedly, make them fall into this trend. In this information exploring era, it is too easy for them to take everything from foreign countries. Besides, it just fits in our modern principle--fast and easy!
I am not criticizing all people who love Hello Kitty or Japanese Fashion, but simply to say that it is important to find a reason for a certain behavior. If the reason to love Hello Kitty is that "oh! it is cute," then I think it would better to know why it is cute. To realize oneself is really the first step to understand one's culture. I think it is a significant issue of post-colonialism for all of us to think about.