It isn't widespread. Then again, hard real-time systems aren't widespread either. I think Boeing was (maybe still is) using RTSJ. The only downside it has is increased RAM footprint relative to C(which makes it unsuitable for very limited devices) and a small performance hit relative to regular Java because some classes need to be compiled to machine language ahead of time (the Hotspot JIT can do some very nifty optimization at runtime, but those come at a cost of non-determinism. Real-time systems always trade performance for determinism).

EDIT: see http://goedel.cs.uiowa.edu/MVD/talks/Vitek.pdf presentation slides from 9/2012 on realtime and safety-critical Java.