Jar File Hell == DLL Hell. Read this article by Charles Miller about the easy trouble you can get into with dependencies upon Jar files. It's very true and it's the Java equivalent to the much despised DLL hell that anyone who has built apps for Windows is quite familiar with. The Java/Open Standards/Open Source guys love to rag on Windows about this, but really they (now we) have the exact same problem or at least a problem with the exact same origin.
And that is... It's really hard to reuse code well. We've heard pitches (some of them from marketing and some of them from techies who ought to know better...) about component-based development, lego-blocks, assembling applications from this magical ecology of web services, and even the basics of Object Oriented programming you learn in school.
Those are of course real benefits to aspire to, and furthermore I would agree that every year the technologies and architectures get better at it. But by no means is it a solved problem.
Particularly vexing, and I think the underlying source of the DLL and JAR hell is change management -- When an app is built from components, and the components change (bug fixes, improvements etc.) it is extremely difficult to keep things working.