Well, a JR Pass is best used when traveling longer distances, especially when you use the Shinkansen (bullet train). For instance a return Tokyo - Osaka will already pay for a 7 day JR Pass. Local travel, usually within cities, simply does not add enough in travel costs to a point where a JR Pass would pay off. Therefor in most cases it makes sense to use a JR Pass for travel nationwide and buy tickets outside of this period when you are exploring Tokyo.
Keep in mind that a pass can be bought in a period of 7, 14 or 21 days.
Does that help?