It is not performance or hosting concerns. Java performs good enough and you can host it on things like EC2.

The problem is that web startups tend to want to develop things quickly and be able to pivot quickly and easily. Java is not best at those things.

I know Java and worked with it for years. I do all of my startup coding in Lisp. Java forces you to do a lot of things that may make your code more reliable and easier for others to use, but it comes at the cost of being less productive, and in startups, being able to develop quickly is extremely important. That is why languages like Lisp or Ruby or Python are much more popular in the startup world.