Functional paradigms offer some innovative solutions to long standing Web development problems :-
1. Continuations fix the inversion of control problem caused by the stateless nature of HTTP. With continuations you can start a function and define some variables you can then 'call out' to the user i.e. send them a page. When the user responds, your function continues where it left off with all the variables still in scope. This means no need for hidden variables, sessions packed with transient data etc. Imagine now that your entire business process is now captured in one easy to read function, not spread over numerous java classes with varied XML structures.
2. Concurrency problems with poorly defined static variables leaking confidential data to the wrong customers are a thing of the past. Everything is passed on the stack as function arguments - there is no mutating state shared between requests. This also makes the application highly scaleable.
3. Security - the continuations approach means that the only way to link one page to another is via a continuation which is unique to each user. This means that data-driven attacks i.e. manipulating keys in forms to get access to data won't work - you can only access data within your continuation.
Try it with SISCWeb - a Scheme continuations based framework that runs on top of J2EE. This allows you to reuse all of your Java libraries and business components but benefit from a functional presentation layer. Also being Scheme based, it offers an embedded 'REPL' so you can build and change your application on the fly without restarting Tomcat or losing existing application state.
It's even better than Ruby on Rails but don't tell anyone - they'll all be using it.