Everyone with lower-level systems programming or hardware experience did know after taking a look that Java bytecode was unfit for direct execution by a CPU. All the bits that you need to make decoding and execution fast in hardware were just missing. And the instruction set is complex in a way that makes the most complex CISC instructions look almost like RISC. You basically would have to put another decoder stage into processors, to make java bytecode into CISC and that into RISC.

Only applications and web people did believe that particular part of the hype, because they didn't know what it took. And IBM consultants believed it because IBM always managed to sell some weird CPU extension for big dollars that did weird stuff, like their "decode XML extension".