It didn't happen because Microsoft was able to kill it. See, for a few years MS had a tight control over the browsers and they refused to upgrade the JVM in IE

It didn't happen because Microsoft was able to kill it. See, for a few years MS had a tight control over the browsers and they refused to upgrade the JVM in IE when they lost their infamous lawsuit against Sun. So Java Applets never flourish. Microsoft control was broken when Google decided create Chrome. Chrome is what allowed javascript to flourish.