Applets are officially gone, but Java in the browser is better

That's one way to say it. The more common way was that users got tired of crappy plugins crashing their browsers, and browser devs got tired of endless complaints from their users.

It wasn't "politics" of any sort that made browsers sandbox everything. It was the insane number of crashes, out-of-memories, pegged CPUs, and security vulnerabilities that pushed things over the edge. You can only sit through so many dozens of Adobe 0-days before it starts to grate.

Java was so buggy and had so many security issues about 20 years ago that my local authorities gave a security advisory to not install it at all in end user/home computers. That finally forced the hand of some banks to stop using it for online banking apps.

Flash also had a long run of security issues.

I never understood why so many banks flocked to building their online banking in applets when it wasn't like you needed anything more advanced than HTML to view balances and make transactions.