I only watched this from the outside, but my impression was that it was an overreaction. Sun had a nice research operating system based on Java called SpringOS, but when clients heard about that they revolted. The transition from SunOS to Solaris had been traumatic and they threatened to jump ship if there would be any more changes ahead.
Sun's reaction was to adopt "only Sparc, only Solaris, only Java forever and ever" as their roadmap, publicly killing SpringOS, Tcl, Self (programming language) and so on. That did make the clients happy.
They didn't do it in a smart way. Part of the Self group joined forces with some other researchers to create a company called Animorphic which would build the world's "fastest Smalltalk" using the Self technology. It was called StrongTalk and had other interesting features like optional type declaration and extensive use of traits and mixins.
Given the buzz around Java they did a quick demo showing that language running on top of their technology, and in 1997 Sun bought them to use that HotSpot technology in their main Java implementation. So they paid a lot for what they previously already had but ignored.
Sun's reaction was to adopt "only Sparc, only Solaris, only Java forever and ever" as their roadmap, publicly killing SpringOS, Tcl, Self (programming language) and so on. That did make the clients happy.