Yes, this is an issue for today, but if you don't believe Java is going to get fast, you probably also think InterCAL is the wave of the future. About a year ago, some friends and I implemented a simple MUD driver and client in java for a class project. With relatively small amounts of time, effort, and code expended, we had a working server and dedicated client, as well as some features that would have been quite a lot of work to implement in other muds. You can associated a graphic URL with a mud object, so that if a player looks at it, the picture is displayed on the client. Because of Java's built-in URL and image handling routines, this required only a few lines of code.
Audio capabilities are just as trivial.
Dynamic loading of new code on the server side was also easy, thanks to Java's ability to instantiate an object by name. Once an object is instantiated, it is retained in a hash table so it will not be garbage collected, and these could be released for GC periodically if memory utilization exceeded a certain limit. Maybe it would be better if you didn't.