> Given the unique requirements of server side javascript, and the fact that the single dominant implementation is maintained by a competitor in this exact space, it isn't a great fit.

Google already has a cloud based, server-side, javascript platform in Apps Script, and has purchased at least one company that operated a JavaScript PaaS, so its not like doing JavaScript serverside is out of Google's reach if they strategically wanted to do it.

I can see why, given the mass of PHP apps out there, PHP might be a priority for App Engine given what App Engine already supports, but I can't see JavaScript as having a significant barrier to practicality.