Even when Microsoft 'Embraced and Extended' Java, it was only on the Windows platform. It was not cross-platform. The whole point of that methodology wasn't to make sure that everyone was using Microsoft-flavoured Java, but to make sure that everyone was using Microsoft-flavoured Java on the Microsoft Windows platform.
Cross-platform didn't mean much in 1995. Which other platform was there at the time? Apple was dead in the water. Red Hat had just come into existence. Netscape Navigator 1.0 had just shipped in December 1994.
The fact that Java was device-agnostic due to the JVM is something that Microsoft viewed as a threat. Bill Gates saw Netscape as a threat with their plugin system because of the idea that the OS would just be a shell to the browser which would run programs via plugins. This one of the reasons that they wanted to destroy the Internet. They feared that it would make Windows irrelevant.
"Write once, run everywhere" is a threat to a company whose entire business model is based on "everywhere" being owned by them.
Arguably windows didn't have the hold it does now in 1995... in 1995, DR-DOS/Desqview and other UIs were prominent, and OS/2 was more popular as a desktop than Linux has ever been (as a ratio), not sure about OSX today. That also doesn't count Apple's penetration at the time which really wasn't as insignificant as you make it out to be.
A lot of that changed starting with Windows 95. Though, it's really 1998 that MS practices in terms of embrace/extend/extinguish was at their top.
I finished my school in 1993. None of the computer science teaching was on PC. I have used mainly sun but also HP, next and VAX computers. PC were only used for word and excel.
The school was lending special network card for the few pupils (less than 10 among 400) who had linux on their PC. The common network card (we had network plug in our rooms) was not supported by linux.
Even if linux was not mainstream, Cross-platform had already a meaning at that time and djgpp was well known to run programs on dos (for example caml-light, the ancestor of ocaml).
I'm not sure what the reference to Netscape Navigator is supposed to mean, but I find interesting that 2.02 (released in 1996) was available on all these platforms:
> Windows3.1
> Windows95/NT
> Macintosh
> BSD
> Linux
> SunOS
> Solaris
> HP-UX
> OSF/1
> Irix
> AIX
> OS/2
> OpenVMS VAX
> OpenVMS Alpha
That's very much debatable. As a particular counterpoint, Apple hardware had a pretty significant market share among educational deployments. There were quite a few schools that were Mac-only even as late as the early/mid 2000s, let alone in the 90's.
Now granted, a big reason why that changed was because all the homes and businesses used Windows (or some specialized Unix like Solaris or IRIX), so the education market eventually shifted to the Windows world, but that happened quite a bit after the 90's.
Everybody talked about thin clients and Java as an OS at that time, there was a massive Java hype going. The things Microsoft struck preempively against largely never materialized thanks to super-crappy broadband (if it even existed) and lousy early Java performance (there are dozens of Java office suites, browsers etc that never got traction or was canned before release thanks to general unmarketability).
