The idea is not that the Java programming language is fading. That's simply not the case. Java will be around and will be an enterprise standard for the foreseeable future.
For those of you that aren't familiar with it, the Java language is part of a much larger, more complex and more capable whole called the "Enterprise Edition", with added functionality and such that might be needed in web applications. They are included in the hope that programmers won't continually have to "reinvent the wheel" during enterprise development cycles.
The analyst's point is that things have gotten so big and complex that developers are now looking at more agile solutions, such as the Ruby scripting language and the excellent Rails development platform. It's an interesting idea and seems to be backed up by Ruby on Rails' growth as a platform of choice. Decide for yourself after reading this.