Java is huge, and is used a lot at enterprise level and in academia. The reason we don't see a lot of it is because it's not exactly an attractive language to use for the web.
It's absolutely everywhere on the desktop, and a lot of universities make it their mission to churn out Java developers to join the work force (hence the term JavaSchools for these universities).
.NET definitely won out on the web. PHP is still the undisputed king of the web, but Microsoft and co have quietly built a top-quality framework and with MVC it's an absolute joy to use at times. Outside of perhaps Python (if I were better at it) I wouldn't swap C# for any other language.