As a young developer (early 20's) I think Java's lack of usage in webdev has to do with several "problems".
1.) Java has the rep of being bloated and slow. (At least when compared to C/C++)
2.) Related to #1, almost all the tools the majority of webdevers use are written in C/C++ and not Java. For instance, Apache, Nginx, Redis, MongoDB, MySQL, SQLite, Webkit, V8 - which gives me the feeling that using/improving C/C++ gives me a better understanding of my toolset whereas Java doesn't have any perceived added benefit.
3.) For Application Development itself, using scripting languages like Ruby/Python/PHP makes for BLAZING fast development especially when using a framework like Rails.
4.) The LAMP Stack (if implemented correctly) can handle a LOT of traffic, I'm talking millions of daily users.
So this leaves almost every web developer (I'd say around 98%) with no reason to use Java - ever. Why should they? With the current tools, I can build highly scalable apps extremely fast and because I'm using scripting languages I'm free to experiment, mix/match, combine, and build new tools in innovative ways. Also, I think because Java is associated with the group of C/C++ and "lower level" languages it really does loose cred simply because it can't compete in effeciency terms with those languages.
Personally, as a programmer who loves C, Ruby and Haskell (so yea I'm biased but who isn't?) just looking at the Syntax of Java makes me seriously wonder what Sun was thinking.