bunnie took a brief look at it at CES. Apparently they were quite grim when they (quickly) figured out who bunnie was. Apparently the booth people had been told to look out for us I guess our Open business model makes some folks nervous.
The problem with a generalized language, when one is pulling these untrusted binaries across the network, is security of the user's data. If you care about that sort of thing (which we do), you really need a sandboxed environment, and at the moment, that pretty much comes down to Flash and Java. Flash then becomes the natural choice if you want to make it easy to do interesting graphics, animation and audio, with all the assets in a single encapsulated file, and do it all in a small binary.
My limited understanding is that you have to explicitly install the widgets on the WidgetStation, which makes it more like how you'd manage a phone or computer's applications, than our system of a relatively stateless player pulling widgets on demand from a server.
The WidgetStation is an interesting product, and we'll be keeping our eye on it, and it's pretty clear they're doing the same. We expect others to pop up over time.