> why our low-level, network-facing system code is not written in C

Really I think these days, in fact since the Morris Worm, people should be asking the opposite question: why is network-facing code written in C given that almost any error can lead to an exploitable security compromise?

I do not buy the performance argument at all any more. So few systems are really performance-constrained by network processing (usually it's the network itself or the disk), you have to write horizontally scalable code anyway if you want to make use of multiple cores, so almost all cases where it's a bottleneck are more cheaply dealt with by scaling rather than tinkering with the software.

There are people doing HFT in Java. The managed languages are quite capable of great performance with a little effort and imagination.