This was the answer I got from KoL a week or so back.
[quote]That varies from Youkai to Youkai, some are literal steel walls, that aren't even tickled by canon fire or such weapons,  while others can regenerate from virtually any damage. Of course, there's those who are as resilient as a human as well. It's really a lottery, whenever you pick a foe you don't know. That's the fun part of it, right?[/quote]

And it's also been implied before that some other youkai are simply intangible ghosts of energy. I mean, really, yeah, youkai are tradiationally ghosts. Why would plain ol' physical weapons effect them the first place? That's why the OOC has this:
[quote]and most of them gained their other abilities when they were sent there by accident, or dragged there by one of the Crimson Sky's inhabitants.[/quote]
[quote]Your character is a Chaser, a human with supernatural powers/skills that allow them to bring the fight back to the dwellers of the Crimson Sky.[/quote]

Not sure about how the Crimson Sky is in this particular incarnation of the RP, but I got the impression in the past that the Crimson Sky was essentially another dimension. Not totally sure about the whole 'why are no other humans aware that youkai are popping around everywhere', but I think it might be because only people who have crossed the boundary into the Crimson Sky are aware of their existence.

Sorta like gaining a supernatural sixth sense? Guess that's also why you don't have Trump telling the public that they need to build a wall to keep the Youkai out.

And eh, maybe there's a weapon section for people who require tools to channel their powers through? Maybe it's expected that Chasers have unique supernatural weapons, or at least ones that have been enhanced by Carver?