It's funny you should mention that, because the language in the blog post was Forth. And you can run Forth
directly on a chip, unlike C. I'm pretty sure that's exactly what GreenArrays is doing[1]. Starting this fall, I think I'll be working on something similar as well.
[1]: http://www.greenarraychips.com/
Or what about lisp? While these were well before my time, my understanding is that they could run Lisp directly in hardware.
And, of course, there have been OSes mostly written in higher level languages than C or C++. The one that springs to mind immediately is the Singularity OS[2] project from Microsoft that is mostly implemented in C#. I think there is still some assembly, C and C++, but the kernel and drivers are in C#.
[2]: http://en.wikipedia.org/wiki/Singularity_(operating_system)