Right wing, nationalist Tokyo governor Shintaro Ishihara set all of this in motion when he set up a fund a couple of years ago to buy them from their owners (by the bye, the US has been renting one of them for target practice for the last 60 years or so), after which he would build facilities on them, exascerbating the problem with China. (It is not clear what happened to the $20mn raised for this purpose). Then, Prime Minister Noda apparently approved the central government purchase to forestall a worsening of the situation by Ishihara, and made the situation a great deal worse.
For decades, the two countries had tacitly agreed to postpone a resolution of the situation, and although an occasional low-level nutcase trawler captain or a low-level nutcase regional Japanese politician tried to upset things, mostly, cooler heads prevailed.
Then, early this year in both countries, leaders came to power (Abe and Xi), apparently seeking to consolidate authoritarian power in the face of an ugly domestic economic situation. Both leaders have attempted to whip up sentiment against the other country. Both have taken a number of steps to escalate, and neither can back down easily. The action described above is at least partly in reaction to the recent Japanese announcement that they are putting (unarmed) batteries of surface to ship missiles on islands (usdisputedly theirs) that would be able to interdict any Chinese ship heading to sea north of Taiwan, thus potentially forcing any Chinese ship south through Philippine waters - with whom China also has a rather warm island dispute. This would amount to a potential bottling up of China, which China seems unlikely to view in an understanding fashion.
Both leaders continue to raise tensions to deflect attention from all of their domestic issues, and to consolidate power. The United States has stated that in the event Japan is attacked over this, the United States would come to its defense as obligated under treaty. Abe seems to be leaning on this pretty hard, and he has shifted very hard to the right. It seems that he is attempting to re-establish Japan as it was before the war in the times of his Class A war criminal grandfather.
It would seem that Xi knows that if it can force Japan and the US to back down, as the dominant sole leader of China, he will have effective hegemony over Asia, with no one to stand in his/China's way. It would show the US as a paper tiger, severely damaging US credibility everywhere in the world, and demonstrating the folly of relying on the US for anything.
The stakes are enormous for everyone, although the islands themselves are inconsequential in the scheme of things. We are moving towards a tipping point, a tipping point where one low level nutcase can send the region over the edge into armed conflict between nuclear powers.
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