That is very bad news for those of us who use Java on Mac OS X. And I don't mean UI programming, but developing server Java (or any JVM-hosted language, such as Clojure) applications.
The situation for Java will now be the same as that for developing in any programming language that Apple doesn't ship with OS X or that ships with a version lower than the one you are targeting.
My suspicion is that Apple is likely to drop Java in 10.8 which gives ~3 years for the JVM community on OS X to get their act together making OpenJDK work well with OS X.
That said, being a Clojure user this does increase my interest in seeing a Clojure-in-Clojure sooner than later. I'd like to see Clojure target LLVM the way MacRuby does.
Probably not a big concern for Apple, but it's common in universities, too, since Eclipse is (until now, at least) cross-platform enough that you can assume Windows/Mac/Linux-using students can all install it on their laptops.
I also manage a lot of equipment that requires java webstart to load a configuration GUI to accomplish tasks that would be darn near impossible at a CLI or any other way.
I logged into Cisco TAC the other day. Requires Java for ticket management tasks.
I use some rf propagation tools for a hobby that are java apps.
I make frequent use of Deskzilla. Java app.
I could go for days. I won't.
I do not want to spend time on debugging VM or dealing with its issues. I've had that with Common Lisp and I don't want to go back there.