Do you like reading Japanese books and magazines, but don't want to pay off-the-rack store prices? Well, reading material in Japan can be expensive, but I'm not sure I'd resort to this.
The guy in the jeans is a bookseller. Sort of. Usually, when someone is finished with their cheaper book or magazine, they'll leave it on the train or throw it in the trash. These books end up in the hands of resellers, who I'm sure get books from other sources as well, and then sell them on the street.
In Shinjuku especially, the reading material tends to be more adult in nature. This guy seems to be quite organized, with several actual boxes and a makeshift table. I wonder about the legality of this, but at least the guy is taking something perfectly useful and putting it back into circulation.
I will mention that there are actual used bookstores in Japan, most notably BookOff. Normal reading material is usually pretty cheap at BookOff, and I've bought a few used books from stores here just as I did in America. In general, used or outdated goods are frowned upon here - there are a handful of secondhand shops but they can be hard to find.
But buying used pornography on the street from a homeless man is just freaky.
That said, this may be considered an "Only in Japan" occurrence, but there are similar situations in America - I can easily think of at least one flea market in the San Francisco area that is known for having found and stolen goods, and you haven't experienced New York or Atlanta until a guy comes into your subway car, opens a big duffle bag, and announces he has movies to sell. Not to mention all the homeless guys in America begging for spare change, and the guys on the sidewalk along Mission Street with their curbside "sales" of goods probably stolen from a nearby car or from a stolen backpack..
Maybe next time I'll buy a magazine just for the experience. On second thought, no.