There's a lot to like about Scala -- and it is a very impressive language in terms of design and concepts -- but there are also a number of downsides.
We used it at work for close to 18 months before giving up on it. We started with 2.7 and went through the 2.8 migration which was absolutely awful: every single milestone build we tested against was binary-incompatible with previous builds and you had to update the entire toolchain to get it all to work together. Apparently, the 2.9 migration wasn't quite as bad but we just couldn't face it...
In addition, the compiler was very slow (and I believe it still is pretty slow?), and the error messages are generally terrible -- especially around the standard library with all of the implicit conversion stuff in collection operations.
The language itself is pretty complex, and some developers struggle with some concepts, so it's hard to figure out an effective "style guide" for what features to use and how to write idiomatic code -- and there's a bit of a schism in the Scala community itself that reflects that: you get the "better Java" crowd, using Scala primarily as a more concise and more expression "Java", and then you get the "pure FP" / Haskell / ScalaZ crowd who mostly eschew the OO side of the language and often produce "beautiful" code that the average Java developer is going to struggle to comprehend. In addition, the evolution of the language has followed a fairly academic arc (understandable, given how/where it was created and maintained) which I feel generates a lot of friction with mainstream Scala users at times.
I loved attending Scala user groups and conferences for a couple of years -- I'm in the San Francisco Bay Area so there was an incredibly active community here for a while! -- and I'm a big fan of FP so that aspect of the language really appealed to me. Ultimately, we switched to Clojure at work (in 2011) and have been very happy with that decision.
As a big fan of FP, I'm very pleased to see several authors encouraging that style in Java, and I think the overall direction of the Java language has been very encouraging (from Java 8 onward -- I had become very disillusioned with Java by the time Java 5 appeared but since 8 came out it has slowly warmed my heart again
after I'd been using Java since 1997!)