JavaFX is fairly decent, and I agree that it's more pleasant than Swing or AWT. It's a fairly good choice for places where you can mandate or ensure that Java will be present on the client (e.g. internal line-of-business apps), but also in places where you don't need to have some ancient version to support some ancient application instead -- which cuts down on the pool a bit.

Unfortunately, most users know Java from years ago and never understood the difference between an applet or desktop application, and in the minds of some users it's still falsely stereotyped as slow or insecure.

In most shops I know, Java is being extensively used on the back-end, but almost no custom Java apps with GUIs. Most shops (and people) who could do Java on the frontend have gone to learn Mono or WinForms or WPF instead, which gives you results that feel nicer to most users.

Purely out of interest, because I might have used one without even realising it, but could you link some desktop applications written in Java that haven't been sluggish as hell or a bit broken feeling?

I'd say nothing. If you're working on JVM, it's the best choice.

You need to write it in Java? Which is the considered one of the worst language of the new generation.