Part of a long line of similar projects: XHP, Pyxl, JSX. My own project Scalatags is pretty popular in the Scala community.

The approach works surprisingly well, both server side and running in the browser (JSX, or Scalatags+Scala.js). There are plenty of websites that don't need heavy client-side interactivity where server side templating + a sprinkling of client side logic works just fine. This is especially true if you can share code between client and server (e.g. via JSX/React or Scalatags/Scala.js)

You get typechecking, interop with normal code, and a high performance runtime for free. That's a lot to like!