Sadly, teaching OS classes with Java is a thing: http://www.amazon.com/Operating-System-Concepts-Abraham-Silb...
I don't see any problem with teaching CS concepts in Java. The concepts of message passing or a heap are the same everywhere. I was referring more to the basics of programming where you should either teach at a very low level (pascal is great), or at a very high level (python can work). I think people taught originally in something low level like pascal or C often have the best understanding of memory management and what their instructions are doing.
If I was teaching someone coding, I'd probably start with Pascal (incl inline ASM), then any language based on lambda calculus to get a good understanding of recursion, and then Java in a large team environment so they could understand why encapsulation, delegation and code quality are important. It's a shame more classes don't actually just have all 100 students work together on a single code base - it would be incredibly beneficial. The code would likely be terrible with 100 newbies to Java all hacking in their own required feature to the detriment of everyone else. That would drive the lesson home quick!
I up-voted your comment as a whole, but I really disagree with this statement. It's reality in many situations, but I think it's a shame that anyone has to work together with a team of 100 on anything, ever. You deal with it, and you solve the problems associated with it, but those are problems of management and process.
It would be a really interesting experiment even: divide up a big problem into 100 or so features and assign each feature to a random person. Give the students some time to work out who they need their code to communicate with and draw up some simple interfaces. Use github or similar with an account for every student. Make the TAs in charge of accepting pull requests. It could be the main focus of a software engineering course.
EDIT: The students wouldn't necessarily need to work with all 100 others - only the ones whose feature their feature interacts with. eg, 1 student could need to receive input from 5 inputs and calculate some statistics - he would only need to talk to the 5 students who would feed him data, and then talk to the 1 student he would feed data to.
Of course then you'd have the student that forgot to include SQL injection protections getting their project goat.se'd during a demonstration.