Then Java arrived and sucked all of the air and mindshare out of the ecosystem.
Java lucked into ideal circumstances, and Sun Marketing played their hand very well. The Web was just taking off, VCs were looking for something new and hot, publishers were looking for the next big thing, and programmers were looking for something that wasn't C++. Java looked familiar enough, cost nothing, had Garbage Collection and Interfaces (putting Gang of Four Patterns within reach of many), and let programmers keep their favorite tools and editors instead of adopting Smalltalk's strange model of doing everything in a (mostly) sealed environment.