You're ignoring that Moore's law doesn't apply to batteries. It's not so much the crunch required (although non-Apple products have suffered here in comparison), it's the battery drain.
I know that was a design goal, e.g. the bytecodes after translation from JVM to Dalvik are smaller. I also seem to remember hearing that not all of a JVM's library is supplied with Dalvik.
Also, hasn't Java ME stagnated? I.e. it's stuck in at Java 1.3 (which Oracle has promised to address).
