Alan wanted what eventually became EToys for his Apple projects. They looked into doing it in Java but figured that digging the old Apple Smalltalk-80 out of the trash bin and cleaning it up would be less effort. So we got Squeak.
Then they did Etoys stuff at Disney and some other neat experiments. Then Alan moved on to 3D shared environments[1] and later to recreating personal computing in 20K lines of code[2]. The idea was to build it on top of Ian Piumarta's COLA[3][4] but to get something out the door they ended up using a stripped down version of Squeak instead. So moving on from Squeak is harder than Alan hoped.