Thanks to letting me know Etoys (I know Logo, but never heard about Etoys before), about JVM: well, Java probably was born with the idea to repropose in Unix the old model, a JVM evolving toward and in-kernel VM with the userland and application sw onto it, a simple class/archives, networked of course "the network is the computer", but 99% probably never get such idea, they just choose Java because a big player of it's time like SUN have pushed an enormous amount on money on it and because "it look like C++ witch look like and improved C" the same reason probably that makes the first PHP popular. AFAIK nobody have really advertised Java as such tentative, so for most was just another programming language with interesting capabilities before, than another programming language with an enormous sw ecosystem (no matter if it's called Nexus or C*AN). Erlang have not seen a similar success because like Haskell it's awful to learn and have had no special advertisement. I know little about Erlang history, but I doubt Ericsson have had in mind something big/large like Java at SUN anyway.

About security yes, the classic model means a full trust, witch yes in the modern world is a big issue but not really that big because also means FLOSS even if back at Xerox that was not advertised at all and their target was commercials. FLOSS at scale means little room for hostile actors since the code born and evolve seen by many eyes, and while it's perfectly possible injecting malicious code (as the recent XZ attack show very well) it's hard to keep it unseen for long and even harder on scale since such ecosystems tend to be far less uniform/consistent than modern commercial OSes that are almost the official ISO with marginal changes per host.

About capacity: in my personal EXWM/Emacs desktop I can link an email (notmuch-managed) in a note (org-mode) and while composing an email I can preview inside it a LaTeX fragment or solve an ode simply because the system I'm in offer such functionalities without tied them to a specific UI, a set of custom APIs and limited IPCs (essentially just D&D and cut&paste, since Unix pipes, redirections etc are not in the GUIs), also in eshell I can use a different kind of IPC, like redirection to buffers, de-facto creating a 2D CLI, witch happen to be a GUI, a DocUI. Long story short we can do modern software with classic ecosystems, it's definitively time consuming, but doable and keep up the current Babel tower of pseudo-isolated bits it's not less time consuming.

I call such phenomenon a cultural clash: the modern model is the ignorant model where anyone can step in, like Ford-model workers just able to do 1/4 turn of a key, but doing anything a continuous struggle and anything learned is short living. The classic model is the cultural model, stepping in is long, demand effort but anything learnt is an investment for life and piled up knowledge pay back all the time making anything easier or at least far less hard than the ignorant model... Not, take a look at our society: we have schools, meaning a year long period of learning before being active in society, learning things that theoretically will be valid and useful for a lifetime. So, if in the society we try the acculturated model why not doing the same in the nervous system of our society witch is IT?