Sadly, this is confirmed at here and here.
This seems like a huge drawback. Being able to share Processing sketches as both an applet and a runnable jar (and therefore Java Webstart) is great, and actually a requirement for many programming competitions and web portals.
I know I can use Java-fu to embed a Processing sketch in a Java applet, but many users aren't going to consider that option.
So my question is, is there a way to export a Processing sketch as an applet or a runnable jar (and Java Webstart) that I'm missing? Or any plans to bring it back in the near future? Why was it taken out in the first place?
Full disclosure: I run a Java and Processing game portal at Static Void Games, and this is going to be a big deal to my users.