Let me start by saying I truly like your API, that finally brings some intelligence into the updating process, by doing a per-entry update of archives.
Yeah, Webstart's always had that as a core feature.
So, if you ask me, the reason people don't really care is that they didn't, in fact, have a problem in the first place - if they wanted this, they just had to install the free servlet that Sun provides, or else implement the protocol that sun documented (I chose the latter, since I don't use no steenkin J2EE
But it's the same as with my API: people want standards, so they use WebStart.
Yes, standards are good, but not THAT good - people will often avoid them unless the features / reliability are quite close. But if your API is offering very little in addition, then most are obviously going to go for the standard (especially webstart, which you can expect to get 1000x as much testing etc).
/me notes, however, that webstart development and bugfixes from sun are so slow / infrequent that in this case any fully-working alternative is likely to receive serious consideration if the author shows even half an inclination to, oh I don't know, FIX CRITICAL BUGS.
So .... maybe you should explain how this is any better than webstart?