In the interest of keeping an open mind I'm not going to refute that this could potentially result in a mixed world, with developers having to support the quirks of different VMs, but I'd like to point out a few things.
- The ASF has Sun's blessing on this, which could be a political position or the might just realize (see second point)
- The folks at Apache have a good track record of doing good work, upholding and _promoting_ the use of standards, and seem to be pretty moral. At the very least I'd wait to see how it works out before doubting.
- Finally, I don't think that we need to worry about a wide-spread pile of general purpose distributions. There are a lot of popular applications out there written in Java. If someone was using a new VM that didn't run those applications I imagine they'd just switch to a VM that worked. I think you'll only see these custom VMs bundled to work with a certain piece of software like the OP suggested, at which point it hopefully wouldn't affect any other VMs a user had running.
Bottom line is I have faith in these folks.