Hi,
The main differences you have between a JS vs Java-backed webscript is the API that you have access to. The Javascript API exposes a smaller subset of capabilities than the Java Foundation API that's available to Java-backed webscripts, although there are ways to increase what's exposed to Javascript or to expose new custom APIs to Javascript if you like.
The other difference which is useful at certain times, is that with a Java backed webscript you have more control over what parts of the webscript framework are used. E.g. with a JS webscript, you are always obliged to use a template for the "view" (usually Freemarker) so that can be problematic if you want to send back a raw binary content stream, e.g. a document or other non-text based content. With a Java-backed webscript you can define a class that implements the WebScript interface directly or uses AbstractWebscript instead of DeclarativeWebscript. You could also do other things like look at or set request/response headers, cookies or other things that won't have access to using a Javascript controller
On the point on Rapid Development, Alfresco's support using SpringLoaded is currently not working for repository classes (i.e. in the alfresco webapp) so it is definitely true that javascript development should be a lot faster - Java webscripts will need a recompile and restart right now, but if they fix the compatibility issue with SpringLoaded, then that might go away.
Another aspect with Javascript is that webscripts can be created and deployed in a running repository without having to stop and restart - they can either be dropped in as code items in the right folder on the file system or can be deployed into the Data Dictionary itself. This can make things easier and faster and avoid downtime windows for deployment into production systems.
Both kinds can be debugged with both logging and step-through debuggers using pretty good tools that are available, e.g. Alfresco Javascript Debug console and remote eclipse debugging for example.
There are also test suites available to handle unit/integration/automated functional testing for both Javascript and Java webscripts, especially RESTful style black box test hitting the URL of the service so testability should not be a concern - although you'll probably find people more familiar with the Java tooling (e.g. JUnit, Mockito etc) than you will for Javascript testing frameworks
If you have a look at what Alfresco themselves use, generally the more complex webscripts are implemented in Java (as well as those that need capabilities provided only by Java APIs) and the simpler ones are done through Javascript
Regards
Steven