Hehe, curious. I think this is an "intentianal bug", so to speak.
The underlying reason is how the Integer class is written. Basically, parseInt is "optimized" for positive numbers. When it parses the string, it builds the result cumulatively, but negated. Then it flips the sign of the end-result.
Example:
66 = 0x42
parsed like:
4*(-1) = -4
-4 * 16 = -64 (hex 4 parsed)
-64 - 2 = -66 (hex 2 parsed)
return -66 * (-1) = 66
Now, let's look at your example
FFFF8000
16*(-1) = -16 (first F parsed)
-16*16 = -256
-256 - 16 = -272 (second F parsed)
-272 * 16 = -4352
-4352 - 16 = -4368 (third F parsed)
-4352 * 16 = -69888
-69888 - 16 = -69904 (forth F parsed)
-69904 * 16 = -1118464
-1118464 - 8 = -1118472 (8 parsed)
-1118464 * 16 = -17895552
-17895552 - 0 = -17895552 (first 0 parsed)
Here it blows up since -17895552 < -Integer.MAX_VALUE / 16 (-134217728).
Attempting to execute the next logical step in the chain (-17895552 * 16)
would cause an integer overflow error.
Edit (addition): in order for the parseInt() to work "consistently" for -Integer.MAX_VALUE <= n <= Integer.MAX_VALUE, they would have had to implement logic to "rotate" when reaching -Integer.MAX_VALUE in the cumulative result, starting over at the max-end of the integer range and continuing downwards from there. Why they did not do this, one would have to ask Josh Bloch or whoever implemented it in the first place. It might just be an optimization.
However,
Hex=Integer.toHexString(Integer.MAX_VALUE);
System.out.println(Hex);
System.out.println(Integer.parseInt(Hex.toUpperCase(), 16));
works just fine, for just this reason. In the sourcee for Integer you can find this comment.
// Accumulating negatively avoids surprises near MAX_VALUE