As we learn the economics of all devices below PCs, we discover that the PC model doesn't work very well. With the devices' very sophisticated engineering, it's not very easy to rip out one operating system and put in another. At the same time, all markets can't be different, there is a need to have a common layer so that you can use the same services such as stock tickers and e-mail notification in every device. Java has been criticized for being too big and for its performance. We're getting better on performance, with performance enhancements this year we'll largely eliminate the performance issue, then we have to work on removing the perception about Java's performance, that may take longer.
Games are very graphics dependent and so have opted for optimal performance.
With standalone games, companies have traded off the cost of development for performance. Personal computing will be alive and well, but PCs won't be doing so well. With Web tone, there will be lots of devices interacting with the Net. We have to find a way to make lot technology easier to use. It's just too expensive now.