>> Basecamp also has had great success.
Basecamp is a great SAS business, you can tie utilization to revenue. Throwing money at the scaling problem (horizontal) is completely realistic in that scenario.
If you can't tie utilization directly to revenue, if your a pure service like twitter, or an online store with a bad browse vs buy ratio ruby is a BIG liability.
So is ruby fast enough? It depends. Its a business decision, not a technology one, and one I would have a hard time justifying for a lot of startups.