Sun is putting a lot of effort behind modularising the JDK in the form of Jigsaw, and insinuating that it should be the module format of choice for other Java developers as well. The only notable player who is using this is NetBeans (and derivative applications).
On the other hand, the industry has standardised around OSGi, with all of the major application vendors basing their runtimes on the module platform, even Sun's own Glassfish. There's even a port of NetBeans to use OSGi as the module system instead of NetBeans own modules. Even Maven is working towards becoming an OSGi runtime.
Is it just NIH, licensing, or another reason?
Excellent question. My understanding is that in some areas OSGi goes way beyond that which is necessary for JVM modules (with all the corresponding complexity that brings) whilst in other areas it doesn't go far enough. So there's a lot of overlap between them but perhaps not enough.
See this blog entry
The rationale behind project Jigsaw and how it relates to OSGi was outlined by the Jigsaw team in Java Posse Podcast 259.
These projects do not entirely overlap and the introduction of Jigsaw does not sound the death knell for OSGi - the scope of OSGi goes beyond anything Jigsaw will attempt. There's much more to Jigsaw than the OSGi team is in a position to provide (language, class and JVM implementation changes). The design of OSGi is based on the current JVM design - the changes to the JVM will benefit everyone.
At least, that is my take from what I've read.
Check out the JavaPosse interview with Mark Reinhold on the subject.
Citing http://blogs.oracle.com/mr/entry/jigsaw:
One feature is missing in OSGi. It does not support modules that are subsets of packages. The export is done on the package level.
Package subset modules are the only way to cut the Gordian knot of JDK dependencies. And a nice hint why you should keep your code clean of circular dependencies.
Edit: I was wrong. OSGi does support split packages.