Java is actually not that bad – Java with LWJGL gets you within a factor of 1.6 to C++ performance, while actually being "write once run everywhere" (for PC, at least). That’s good enough.
Maybe on a Hotspot VM with JIT, while using frivolous amounts of memory for good GC performance.
You're not allowed to do JIT on consoles or mobile and you're memory constrained. A PC-only game engine is going to be a tough sell these days.
Also, unless you're bundling a JVM (not sure about the legals here) you have to make your Windows (i.e. primary) customers install the obnoxious Oracle Java runtime.
Yes, the track record is often negative if you want to make action games on not-Windows because of GC pauses caused by Mono's inferior garbage collector.
As for Java, Notch managed to do it for Minecraft, except for the mobile port which I think I remember reading was re-written from scratch on iOS because the performance was terrible.