Python lets you pass functions other ways than using lambdas, you know. If you've defined a function with the standard "def foo" style, you can pass "foo" as an argument.

Even the standard "1-line lambdas LOL" limitation can be circumvented by defining the function elsewhere and making the lambda a call to it.

First class functions simply mean that a language treats functions as it would nearly any other data type, namely that they may be passed as parameters, bound to variables, and returned from other functions.

Python's poor handling of lambda expressions do not invalidate that functions are first-class citizens.

I have been building large projects in Python for the last 10 yeas and never really thought "Hmm I wish I had more powerful lambda functions". You can always just have regular function and pass that around. Why do you need lambdas so much?

Also, packaging is a whole different can of worms (but hopefully will be sorted by distutils2!).

Java shines at the huge end, but for most everything else python is a more productive choice as it is so much more concise. Perhaps you are not yet using it optimally?

b) python does have first class functions?

c) threading still happens, you just can't take advantage of multiple cores. This isn't as big of a problem as you'd think though, you can still write very fast code.