Jambi's changing status, I think, is due to Java's evolution as THE backend language for server heavy processing things like databases (Oracle) or massively parallel scientific computations. At the same time, Java isn't used for graphical applications nearly as much as it was back in say '99.
Jambi tried to solve the problem with Java (namely the UI libraries are terrible), but maybe it was too late?
I don't think that is really the case. I remember being at a Java conference for work once and there being a show of hands. Half of the developers attending were server side (and web), and other client side.
The main reason why Jambi probably didn't catch on, IMHO, is that Swing is standard in Java and is much much more established, regardless of its flaws.