I think this is a good idea. PHP solves a niche of small sites with slightly dynamic templates.
(To some extent it owes more to rebol than to php - it has a large grammar and a notable amount of literals.)
It makes first class what other languages embed in strings - sql, urls, html, etc. In doing so it can solve a large class of security problems that plague many php projects - you don't need to worry about sql injection when the language handles the query parsing.
PHP was successful for a number of reasons, one of which was that it was embedded and exposed a number of cgi specific features into the language ($GET, $POST, etc), this continues in this vein to embrace urls, sql and html as part of the language. The programmer no longer has to deal with escaping or transforming or sanitising strings. This is cool.
Given it runs on the jvm - it should be possible to layer this atop of heroku or google app engine without worrying too much either.
This approach isn't new either - philip wadler tried in a similar way with the functional language 'links'.
(disclaimer: I think php is a terrible, terrible implementation of some good ideas - the library, language and implementation are notable examples of bad ideas in programming)
It is an old question 'How do we tell truths that might hurt?'.
If you try the well reasoned analysis, you get passed over. It turns out that no-one pays attention unless there is a fight happening (c.f. tech crunch's reporting style)
'If the truths are sufficiently impalatable, our audience is psychically incapable of accepting them and we will be written off as totally unrealistic, hopelessly idealistic, dangerously revolutionary, foolishly gullible or what have you.'
The morale is - everyone admonishes a flame, but nothing else gathers posts quite like it. If you think something is terrible, holding back will get you nowhere.
