I feel obliged to mention that you can enable/disable Java, Flash etc. on a per-site basis. I do. Browser plugins like Noscript and Flashblock have become very popular lately. Personally, I find them very valuable, especially when I have to work on older computers.
Come on, people can do much worse things than that, if they are malicious enough. Without the aid of this miner.
It's the same old story: the same technology can be both "good" and "bad", depending on what use you make of it.
Unfortunately we can't stop the march of technology. If it can be done, someone will eventually do it.
I did not start this project with the intention of stealing the CPU time of unaware surfers.
I started it because I think it can help the diffusion of Litecoin. (And because I love programming )
Of course this miner will always be somewhat slower and less profitable than compiled miners, but it has other advantages.
First and foremost, it will run on almost any platform, and with little to no configuration. I am sure that, as kjlimo said, "simple minded" people will enjoy that.
Also think about this: the average user (who might not be familiar with Bitcoin and its software) will be (rightly) reluctant to download and run an executable file from the Internet. And for sure he/she won't have the time or knowledge to check out the source code.
With a Java applet, you don't have to trust the author of the code that much, because the guys at Sun Microsystems have worked hard to make Java as secure as possible. That's why, by default, browsers just run Java applets without asking too many questions.