I think Java prominent by its omission. So much so that it underlines the GP's point exactly. When you read all the stated goals of the project you can basically put a tick next to Java on every one:
- runs in all browsers
- works client side and server side
- scales from large projects to small projects
- contrary to your point, supports in browser scripting (admittedly, crudely).
- highly performant (with some specific issues)
They could easily inherit nearly all of these qualities by starting with the Java VM and going from there. The reasons not to basically boil down to NIH, politics and the encumbrances (not sure if there is a way to tightly embed a GPL engine inside a non-GPL product, but at this point it would rightly scare the hell out of anyone making a browser to even attempt it).
I see this as very much Google saying "We need a new Java, one that we control this time".
Java doesn't scale to small projects and isn't "highly performant" when the metric you're trying to optimize is page load time, although it could conceivably be made to "support in-browser scripting".
Also, I think an implicit item on the list would be "doesn't suck", which is the whole point of the effort, not merely a constraint on feasible solutions like the "goals" you listed. They want something that sucks less than JavaScript, not something that sucks more, such as Java.
So I don't think "the reasons not to basically boil down to NIH, politics and the encumbrances"; they boil down to Java being a shitty non-solution to their problem.
I understand that you don't seem to like Java, but it is really immaterial to my point. They stated all the goals of Java in their feature list and then didn't mention Java. If they thought Java sucked or didn't meet their requirements even though it has the same stated goals then they might have said so. But they didn't say anything at all - it's kind of an odd omission to make by accident.
I see this as very much Google saying "We need a new Java, one that we control this time".