Mongrel is an incredible web server, and it does a remarkable job of serving a lot of Ruby code very robustly. If you truly need 10 million transactions a minute inside a single process, then you wouldn't want to use a standard Ruby process, no. But if you are doing anything reasonable, Rails *can* be fine.
But I think the original post in this
thread hits a sore spot for me. Don't confuse Ruby (the language), the Ruby interpreter (the platform), Rails (the framework), Java (the language) and Java (the platform). Ruby (the language) is a highly productive programming language, which has an amazingly tight frameowork in Rails, that can run on the Ruby interpreter or on the JVM (the Java platform).
Java (the language) doesn't buy you massive multi-million-tx/sec scalability. The JVM does. In fact, I *might* argue that the language itself holds you back some.
But if you can write a great app in Ruby using Rails and deploy it and scale it on the JVM, then what, really, is the problem? You can bet that this is part of the future Sun sees, because they brought the JRuby team in-house to help make it reality.
However, as Lasse pointed out, not every tool is right for every job, and this is a point we make again and again, both in the book and in our public lives. Choose the tool that solves your problem; don't try to make your problem fit the tools.