Java is popular in the broad sense, but it doesn't seem to be very popular with the developers I know that are creating and interested in creating mobile apps.
Even if its not well liked in the most tech forward circles that may be the most desirable audience for google, there should at least be familiarity with it. And I don't know about you but I can't think of any even halfway decent and plausible alternative google could have chosen.
Probably a combination of iPhone's traction and the general negative sentiment towards Java. I personally feel Objective-C is a good fit for mobile development, because its so easy to drop down to C at any time. And I'm sure I'm not the only one who thinks its conceptually simpler than Java (The Obj-C all just C structs and functions under the hood).
I think it's general sentiment against Java, the language. Many I know, including me, have been there and don't want to go back. At the same time the JVM is a pretty interesting space for language runtime.
