Yeah the Sheraton was badly damaged in the Yogyakarta earthquake of May 2006. I think that the fact the occupancy rates weren't fantastic has meant that hasn't been much of a spur to get it open again.
I probably think if it hasn't happened by now means it won't. I hope it does,however. I enjoyed my stays there and an international hotel (imo) helps bring more tourists to the city which is always a good thing.