The %build section doesn't contain a 'make' command so the real building will be done in the the %install stage (with wrong paths). Furthermore kaffe uses automake and supports DESTDIR so. That's why the usage of '%makeinstall' is superfluously and 'make DESTDIR=$RPM_BUILD_ROOT install' should be used instead.
Still in Pinstripe
There's a make there now, although I really don't recall when I put it there. Thanks for the report!