Both the Java language and JEE have always been far behind PHP when it comes to hosting services and ISPs. For example, in France, Free and SFR Neuf offer up to 1Gb hard drive and a MySql database for everyone to create their websites in PHP. For 60€ / year, you can easily have a professional shared server with the LAMP stack installed.
If you're looking for Java Tomcat hosting, you'll have to triple the price (http://www.hebergement-java.fr is one of the cheapest), with only JSPs and the trusty old Tomcat 5.5. I know a server for Java needs more memory and more CPU than in PHP, that explains the price increase.
But as it is really easy and cheap (free!) to have a PHP-powered website with a hosting company, more and more people developed web applications in PHP, then frameworks, then extremely powerful and complete tools (let me think: WordPress , Drupal , Joomla) that allow more people, even without development knowledge, to create and maintains their own websites.
For all this reasons my website ,which describes a new Java web development tool and concept, is using PHP! I'm sure you will all find great Java tools that do the same (I see Zimbra and Lutece), but how much money do you need to host them?
Now, with Cloud Computing and especially Google Application Engine, CPU and memory consumption are less of a problem, as all of the available servers are executing the applications. For example, an application may need great CPU power, but not all the time! The available servers are much better used by Cloud Computing.
Thanks to Google, you can develop and host your Java application for free ! I hope Google App. Engine will see a lot of Java applications, that other hosting services will offer compatible (or even better, complete JEE) hosting, that will in turn improve the number of Java applications, frameworks and finally powerful tools in Java.