Headed towards the stellar graveyard?
Is Mr. "No one _still_ working at Sun calls me ponytail boy" Schwartz to blame? No more than any of the other top executives there. Like many, who rose too quickly, Jonathan is a victim of his own success. He believes that he really is smarter than just about everyone else, rather than realizing that he is just very lucky to be where he is.
There are a ton of things wrong with Sun, and fewer things going right. As for Sun's overall strategy, they do have a clue, but really don't know how to execute. Sun has never really been about execution. They've relied on being lucky and having the hot product at the right time. Even a blind squirrel finds a nut once in a while.
Their chip strategy is tenuous at best, their software strategy could pay-off long term, they just don't have a clue how to monetize the transition from proprietary software to open-source and paid support services. As for their storage 'strategy' well, Sun's never had a clue and continually show their naïveté. Their recent announcement (covered in the Register) about “developer tools” for turning a Solaris system into a storage appliance using ZFS is just laughable. Even if they are successful in killing their competitors’ storage profits, Sun has no plan for how they can make money.
However, Sun's real problems all stem (IMHO) from their culture of "be different", "engineers rule" and "If we didn't invent it, deride it". In my experience this type of culture rarely changes unless the board goes for a total shakeup. This can and does occur, ala IBM with Lew Gerstner in the early 90's. Though with Sun's board bought and paid for by My Sun himself (one Scott 'turrets syndrome' McNealy), a board induced turnover is unlikely.
The more likely scenario is to die a slow and painful death by 1,000 cuts as Sun slowly dwindles like former rivals Novell and SGI have done. It looks like this Sun won’t go nova anytime soon, instead it’s looking more like a brown dwarf.