Banks your are viewing this from too high of a perspective. Ignite`s market is the emebedded processor not the desktop market.
Of course if you could run java native w/o the jvm you reduce the overhead of processing. However, you also force developers and the desktop to be dependent on a chip. How do you upgrade the chip? The idea and beauty of Java as well Microsoft .Net is that they are platform independent. As soon as you introduce a chip you have lost this independence.