Rails is in a though spot right now. Facing a big challenge, a huge challenge even. And arguably, a challenge it didn't have to face.

Why introduce a new VM and break backwards compatibility at the same time? Why not first give people a better VM, with bytecode, better threads and all the other goodies? When people know that upgrading is painless (think Perl) then you can just upgrade without thinking twice about it. If you know you have to check the compatibility checklist of all software you have ever installed (for all you know your text editor depends on Ruby nowadays) then upgrading becomes a very unappealing task.

So, step one: introduce new VM. Step two, still don't break backwards compatibility. -If- you have to break the language, at least put some legacy mode in, so people don't have to port every script on their system.