No, it's also about a ridiculously bad old architecture to a better new architecture.

There is nothing about Java that stops you writing your CSS in CSS and your JavaScript in JavaScript. In fact, that's the standard way to do it. It seems that at PayPal, something went wrong early on that led them to build some byzantine homebrew web framework as a rod for their own backs. I have no idea why anyone would do that, but it seems to be a remarkably common thing to do.

Paypal is ancient. It's likely they developed their web framework before any open source java web frameworks became popular. Paypal existed around 1998, Java Struts 1.0 came out in 1999. Struts 1.0 is probably one of the big reasons many people flocked to PHP.

They probably made their own web framework because nothing good existed at the time.