I come to think that the main issue with doing web with Java is the inability to do auto reload. There is somewhat way to do this in case of using remote debugging, but it works only on method level. And even when this works, most of the Java tooling actually sits in the way of this. For instance web servers/applications, frameworks and build systems.

However having the framework in Java and actual web app logic in some dynamic language works very smoothly - I've done something similar with JS (Rhino) where the server actually takes care of auto reload and module system. Not really finished but: http://code.google.com/p/sodejs-java (wow maybe I should move it to github finally).