This is true, webservices-rt.jar is not needed for callbackhandlers, there just happens to be an implementation of UsernameCallback in there, that was being referenced. But we are using some web service security classes that requires this class to be available to my client, and others such as StreamingAttachmentFeature and JAXWSProperties.
Therefore still need to use it in my clients. At this point seems to be more of a setup problem with jdk,netbeans and/ or user(me) error. Thanks for the suggestion though.
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