AFS' conflict with Oracle centers on "Field of Use" restrictions that Oracle placed on Technology Compatibility Kits for the Java language. As I understand it, the TCK's are only licensed for use under the GPL, which effectively bars Apache from a license under their own terms (the Apache license is not GPL compatible).
This is not the first time this battle has been fought. It was fought in 2007 with Sun as well. More info here. As far as I can tell, this issue was never satisfactorily resolved. But Apache is still around, and all of their software products are still here and being vigorously maintained and enthusiastically used in software projects.
Note that the lack of a license for the TCK does not bar the unrestricted use of the Java language for Apache products, and Oracle offers a TCK that can be used to prove Java compatibility. Apache merely wants their own, unrestricted implementation of the TCK (called "Harmony").
When the JSR voted to move forward with Java SE 7/8, they did so begrudgingly, and on the technical merits only. Most of the members are unhappy with Oracle's "Field of Use" restrictions on the TCK. This kind of thing illustrates why it takes so long for the Java language to get new features.
I don't think the changes to [the
license agreement for TCK] would have
any practical difference from what
they were under Sun's leadership. Sun
didn't remove the restrictions on the
TCK and showed no intention of
changing their mind. The new license
wording just clarifies what it is that
they are prohibiting (basically a
third-party open-source implementation
of the Java platform).
So this is exactly as it was before,
only specified more clearly. So, yes,
the Java SE specification is not
entirely open, and it never has been.
Somehow, this rebellion broke out only
after Sun's acquisition. It seems to
me that the reason is that Oracle just
seems an annoying organisation (which
it definitely is), and Larry Ellison
seems like an annoying guy (which he
probably is). Also, Oracle is just too
powerful. IBM and Google like the Java
leader to be weak. Sun was. Oracle
isn't. That's the only reason this is
all happening now.
I don't think this
affects the Java user community that
much. We have the OpenJDK, and
commodity Java products have never
made much use of Harmony. This only
affects huge companies that want to
distribute their own Java platform
without licensing it from Oracle.