I think that people might be mistaking the purposes of SGML and Java in this discussion -- I would hardly want to write a book in Java, any more than I would want to design a spreadsheet in SGML or cut through a 2x4 using a hacksaw (though all three are possible).
On the other hand, Java provides an excellent, platform-independant environment for presenting or processing SGML documents, and SGML provides an excellent, platform-independant environment for linking together and structuring Java applets.
The arguments about SGML replacing Java or Java replacing SGML are something like the VRML hype of a year or two ago, when people claimed that VRML would replace HTML. It didn't, of course -- VRML was no more suited to encoding electronic texts or presenting TV listings than HTML was to providing 3-D models. A good craftsperson uses the right tools, and doesn't try to drive in a nail with the handle of a screwdriver (at least, not on a good day).