After unveiling the prototype, Steve Jobs called Schwartz's office and told him that Apple would sue Sun if they moved forward to commercialize it. Jobs claimed that the project is infringing Apple's IP.[3] Regardless of the threat, Sun determined that the project was not a priority and decided not to put more resource to develop it further into product quality.
Not sure. But around that time Sun had invested heavily in the Gnome project and made a lot of commits that enabled lots of more "boring" things to be added. eg. i18n, accessibility etc. This was because with Linux based Java Desktop (i.e. their polished gnome implementation) they had won various corporate & government contracts in different industries which required these changes, benefiting the gnome project immensely.
Whether the very popular compositing WMs (e.g. Metacity/Compiz) indicated a necessary investment in that area (hacker prelude to new industry), I don't know.