Yeah. You're right. 100%.
However, comparing Delphi marketshare to Java marketshare is kind of pointless, because Java has something Delphi will probably never have: portability. Remember Kylix? Didn't fly. There are both technical and market reasons why.
You can't just compare Windows-dev-tools with portable dev tools, when comparing market share. It's like saying "the Toyota Corolla is selling well, therefore there is no market for the Porsche 911". Java and Delphi are only competitors in a very small way. How many Java developers develop commercial Windows apps in Java? Not very many. Java is an in-house-software-systems-language, and web-services oriented system.
All the stuff people write in Java is stuff I'd never write if you paid me 10x what I get paid right now. BORING CRAP. Sorry, but there it is. Not all developers are the same, and not all development projects are the same.
Delphi's core constituency is formed by people who write software for Windows only, and who want software that runs on every version of windows ever made (even back to windows 95, or windows 98, if you really need to) with a single binary EXE file, with no runtimes needed, no necessity of using DLLs, and so on. Delphi has two major streams within that core-constituency, in-house-app developers (like myself) that write vertical line of business applications that a company either uses, or sells to its small customer base. My apps have to run on customer PCs around the globe, in every country in the world, without DLL hell, without runtime (sucks to be .NET) and on every version and every service pack of Windows ever released.
Even Microsoft can't do this with their own tool set. Oh, and they abandon their own developers (hello VB 6 fans, how ya doin?). So your choices are:
1. Abandon your Windows-only strategy, go Java or something portable. (not a bad idea.)
2. Use whatever latest pile of CRAP Microsoft is shipping these days, and be prepared to rewrite when they ship you a whole new steaming pile of crap.
3. Have an insulating layer between you and Microsoft's platform. That is what Delphi/VCL gets you.
If you need to write software that runs on Windows, CodeGear is the only thing I would use. Otherwise, get me outta here. The day I can no longer work as a Delphi developer, I get a new career, or maybe I switch to Cocoa/ObjectiveC on Mac OS X. At least it's elegant and beautiful, and not a stinking pile of MS-crap.
I'm bitter today, don't I sound bitter? Yeah.
But there is a lot of hope. CodeGear is spinning up now, and they've shipped my favourite Delphi version ever (already), Delphi 2007, and Delphi for PHP, both of which are amazing products. Now, let's see if they can market it. That's where the old BORLAND always sucked. Great on technology delivery. Crap marketing.