The POM file quoted above is malformed. The <plugin>
tag should be nested inside a <build><plugins>
block; m2eclipse
is therefore unable to find the compiler details from it. The only strange thing here is that this doesn't produce any kind of error or warning message; it should at the least be resulting in a warning that the XML file doesn't conform to its specified schema.
Another related problem I've encountered: if you specify a java version > 1.7 in eclipse Juno, the value is ignored, even if you have a Java 8 JDK configured. It appears 1.8 only works correctly in Luna, and perhaps Kepler with some updates installed (haven't tested that configuration).