But it sparked a bigger backlash in Washington, where there were accusations of entrenched racism against blacks among the Japanese and protests were held at the Japanese Embassy and threats made to boycott its cultural exports.
This was at a time when Japan, with its then go-go economy, was perceived to be a threat to the United States. Fearing the book was adding a culture war to the trade disputes with Washington, Japan's Foreign Ministry had a word with the publishers, suggesting that a picture book and its spinoffs were not worth wider trouble.
Japanese publishers withdrew the book in less than a week. The dolls went too.
In Nagano City, the education board sent letters to every kindergarten asking parents to burn any copies of "Little Black Sambo" they might have at home.
Of course, Nagano's civic leaders had their eyes on much more than a children's book. The city was then bidding for the Winter Olympics and was eager to appear cosmopolitan.
"Nagano was very nervous about its reputation," said Kazuo Mori, an educational psychologist at Shinshu University in Nagano. "The reaction was to be overcautious."
But Mori said most Japanese were surprised to learn that "Little Black Sambo" had racist overtones. "It never occurred to us," he said. "It was just a story."
Intrigued by the controversy, Mori conducted academic experiments involving readers that he said showed the Japanese take nothing racist away from reading "Little Black Sambo."
He offered a group of kindergarteners and another of senior citizens a look at two versions of the story: one with the Dobias' drawings, another with the central character drawn as a black Labrador puppy. The test groups found both illustrated versions equally amusing.
Ergo, no racism, Mori concluded.
He then fine-tuned the drawings of the puppy, found himself a publisher, and in 1997 released a "nonracist" version of the tale, titled "Chikiburo Sampo."
That version has sold more than 50,000 copies.
"It's a sort of hit," he says with a laugh. "I bought a car."
The original "Little Black Sambo" was published in London in 1899 and in the United States a year later. Written by Helen Bannerman, a Scot living in India, it recounts the adventure of an Indian boy who encounters tigers and bargains for his life by surrendering his fine clothes.
But the tigers, each with a different garment, fight over who is the grandest among them, pursuing each other in frenzied circles until they dissolve into pools of butter.