However, I think this is more due to the fact that you generally don’t use Java and C# at the same time – you use one or the other for months or years at a time, which causes you to rust in the one you’re not active in.

A consequence of specialization is that you need more initial people to complete an entire project. Then, you need a redundant extra number of people in their specialty to mitigate the risk of something happening to someone. It’s feasible for large companies to do this, even if it probably isn’t efficient. To a small company however, one person (or a few) that can do a little bit of every job well is critical.