Am I? Did you read the bit about how they reclaim memory used for initialisation and convert it to heap space? How is that going to work with Java?!
I tried to find information about MicroEJ but their website doesn't really tell you anything. I assume it supports something like Java Card rather than actual Java.
These kind of space restrictions have forces from 2 sides that meet in the middle: (1) sizing the space, for cost reasons (2) spending engineering effort on space usage.
768 kB of RAM (on top of the ROM holding program data) holds a lot of state. There exist TCP/IP stacks and JS interpreters with RAM requirements of 2 kB, ~3 orders of magnitude less.
About jettisoning init code and data, I don't know specifics here but Java the language supports heap space recycling and code (class) unloading very well.
I tried to find information about MicroEJ but their website doesn't really tell you anything. I assume it supports something like Java Card rather than actual Java.