Heroku Java deployment is "unusual" and there are many Java developers out there that prefer WAR/EAR that complies with JEE5 (legacy purpose) or JEE6. If you can achieve that, get ready for massive users, I know there are people who don't like GAE model for various reasons.
Basically: make it like Jelastic and don't limit it like CloudFoundry (no EJB 3.1, etc etc).
JavaEE deployment model is preferable over some "weird" setups.
I'm not much of a Java person myself, but our dev team has told me that the WAR + Tomcat route tends to work best on AppFog, at least at this point in time. This is also our recommended way of running other JVM-based languages.
Your dev team is spot on. The Java market does not have a solid Cloud Platform so far because most vendors go their own way to support Java (Heroku and CloudFoundry are the example of going their own way).
The only Java-friendly PaaS so far is Jelastic simply because they support GlassFish and Tomcat utilizing standard deployment model. But Jelastic does not provide the infrastructure (data-center or AWS, whichever), they partner with hosting providers, which I think is not a great move.
If AppFog can come up with a more standard/sane Java PaaS model out there, you guys can win that particular market.
If I may suggest more:
1) Tomcat 7 instead of the older 5 or 6.
The JavaEE landscape has changed significantly from J2EE 4 to JEE 5 to JEE 6 in which each major version moves toward _way_ less code and reduce XML/settings/configurations to a very minimum.
2) TomEE (if possible, or as "add-on"/next-level offerings)
Tomcat 7 implements a subset of JavaEE 6 (known as the "web-profile": Servlet[controller], JSP[template], JSF[view/controller], Dependency Injection, JPA[orm])
Enterprises who are still in love with EJB 3.x need TomEE.
