I saw this today and had to pass it on. Apparently Rails can handle a Slashdotting just fine. Like any other web technology, you can create scalable applications, or not. As long as you make reasonable technology choices, it's up to you and your architecture to scale.
Everyone tells me that Rails is supposed to be slow, but I keep running into examples of how well it scales. I've had a few client engagements recently where I thought Rails would need help to handle the load and it's pleasantly surprised me out of the box.
So if you "know" Rails doesn't scale, do you know this because you tried it out or just heard about it? People mention Twitter, but remember that Twitter had issues at 11,000 hits per second. (Do the math... do you need 11,000 hits per second?) And their issue (a single database behind Rails) has been fixed. (