you're confusing java applets circa 1997 with the java platform.
take a look through the it job listings and see how much java comes up.
much, if not most, server side *enterprise* work is done in java, which is a mature, robust, reliable, performant and scalable platform for which there are myriad commercial and open source libraries to give any project a great set of building blocks and frameworks on which to build.
i check out language du jour a couple times a year, and every time it reaffirms java's benefits.
the problem with applets is they were generally pretty hacky, but there are some good ones out there.
( check out the yahoo games website - my wife has been addicted to literati for years, and its a nice little java applet ).
java on the desktop has a place too, however its the same set of rules for design and structure as applets: done well, nobody would know/care what language its written in, but done poorly without care for threading models and it'll quickly turn into a steaming pile.
then theres j2me, and i'd wager if you have any tivo type device, or even set-top box for your cable service, or blu-ray player, or most mobile phones these days, then you have java working for you there too.
not that i'm arguing for applets by any means, but the more people spread the same old rants as above, the more i'm inclined to correct them.