sigh. Poochie.. you know the A220 cabin is actually raved about by most flyers right? have you flown on one? Plus of course the 220 is designed as a smaller capacity aircraft for thinner routes - ie regional. You'll see those on ADL-OOL, MEL-TSV, SYD-ROK and PER-BME more than MEL-PER.
Or do you mean the 320/321 (which is most likely)? In which case - a wider cabin than the 737 and thus a smidge more comfortable in both classes.
Japan is a TOTALLY different situation than Australia. They have one huge thing we do not - VOLUME.
In the good old days Japan used modified 747SP's (dubbed the SR iirc) in Japan that carried a huge number of mostly Y pax between say Tokyo and Osaka - the demand being that high - even with Shinkansen offering a very good alternative.
Australia is a huge country that has only a few population centres with a whole lot of nothing and much lower levels of demand. widebodies like 787's and 350's are very expensive, and also actually designed for long haul ops - flying them on things like MEL-SYD is actually fairly inefficient for the aircraft but the capacity is what it's about - which is why you do see some of these aircraft floating around doing these runs.
Very rarely does transcon flights like PER-MEL/SYD require major upguages in capacity (think AFL Grand Finals and the like - where QF used to be able to throw a 747-300 on there back in the day). QF don't have 787 capacity sitting around doing nothing to just bung on the routes - except as the tags eg QF5/6/9/10 - which they do and do sell as domestic - which is exactly what you're arguing for.
The other thing is that QF, VA etc operate on a frequency model over capacity. Japan could support say hourly or two hourly 787-8's on some routes with demand. You would NEVER see that on Australian routes even if the airlines could support it. The preference is to provide high availability schedules eg MEL-SYD every 30min-an hour, even :15 during peaks on smaller aircraft like the 737. If QF did not do this and had the wides you want, you might see flights at say 0600, 0800, 1200, 1500 etc. Not exactly what most punters would want. And on transcons? instead of say 5 or 6 transcons you might come down to 2 or 3.
yeah the narrowbodies are unpopular, specially on transcons, but they provide for great schedule flexibility for the airline and in the Australian environment that's better to offer schedule and price flexibility to ustomers.
QF's decision to replace the 737's with A320/321's (mostly 321's it seems - which is a very AA strategy imo) is basically the same thing - in a lightly bigger cabin, more efficient aircraft and again providing for frequency =- and the capacity increase of a 321 vs a 737-800 will probably see less widebodies on domestic routes full stop (but probably more seats in J per departure for upgraders).
Anyway can't equate Japan to Australia for quite a few reasons.