People said the same thing about auto in C++. Few years later and everyone I know (and codes C++) loves it and uses it all the time.
Its a great addition and like lambas will certainly improve how we write Java
Your comparison is surprisingly apt, since both languages commonly have long type names (std::vector<int>::iterator, etc.) and I often find that code that does type inference often reduces clutter because I don’t have to know the exact type that something is, but by looking at the code I generally can know what the “high level” type is.
My experience with C++ is that auto sucks when you're reading someone else's code, and while it's a useful tool it's one that should be used thoughtfully.