By July first, the web’s only free application host with an in-browser editor will be dead.

That’s right, AppJet’s hosting service for apps built with server-side JavaScript will be discontinued in favor of its flagship product, the real time collaboration tool EtherPad.

Few services matched AppJet in terms of simplicity. Options like Aptana Cloud may have free accounts, but rely on a desktop editor rather than AppJet’s slim, in-browser one. The comparable Reasonably Smart has gone silent since being purchased by Joyent early this year.

If AppJet was practically one of a kind, why end it?

The platform was certainly developing a devoted niche of users, but development appears to have lagged behind once EtherPad became commercially viable. According to the official announcement, this came as something of a surprise to AppJet since EtherPad was initially developed as a demo, the best and brightest example of an app built with the development tool they hoped to promote.

But as we pointed out, EtherPad turned out to be an incredibly useful tool. When enterprises came knocking, asking if they could purchase EtherPad either to run in their own environments or have on-demand, it turned out to be just too appealing.

But however promising, EtherPad is likely to face some fairly stiff competition from popular enterprise tools like Google Docs or Zoho Writer (whose parent company was recently renamed to Zoho as well). Even Bespin, the collaborative code editor from Mozilla Labs, could cut in to potential market share.

Still, there is nothing quite so suited to fast, real time editing as EtherPad, and the willingness to run with a venture that’s proving to be a hit bodes well for success in the long run.

And as for all the AppJet users left out in the cold?

AppJet will let you download a version to host yourself, or it recommends you try and run JavaScript on top of the Google App Engine using Rhino. Whatever your choice, good luck and godspeed AppJet developers, because EtherPad is the future.