One major problem with Ruby has been that the performance as been much slower than Python. This is no longer true with Ruby 1.9. I happen to have done a benchmark using a recursive Fibonacci algorithm yesterday, results: http://pastie.org/528717 source: http://pastie.org/528720
Just using Fibonacci for testing out VM performance is a bad idea. You need a broader viewpoint. That said, every language shootout is basically rubbish as there are so many variables who play into this.
I don't think performance is holding ruby back I think that libraries especially mature and massive libraries, or lack thereof, is holding ruby back. Not to say people aren't working on it give ruby some time it will probably catch up especially with rails but just not right away.
Performance has always been a finger in Ruby's eye, but with 1.9 that doesn't seem the case.
Regarding libraries; you are right. Ruby has a lot of code out there, but much of it is in random repositories maintained by random people. Hopefully this changes.
I'm not convinced that's true, as the depth and quality of rubygems are inferior to the depth and quality of eggs available in python. Find me e.g. a "gem install scipy" equivalent for Ruby.
However - "easy_uninstall scipy" REALLY needs to work!
Rubygems is a separate system from deb/rpm, but works roughly the same way. Typically it doesn't do binary packaging the way they do it, though, and if native (non-ruby) code is required it is compiled during the install.
" think that libraries especially mature and massive libraries, or lack thereof, is holding ruby back."
JRuby FTW.
Yes, there are downsides to sitting on the JVM, but for anything other than one-off scripts, or where start-up speed is really important, JRuby gives the best of both worlds[0]: Ruby syntax with JVM libraries.
[0] Clearly if you do not care for Ruby syntax then this is not a win. I believe, though, that JRuby is more advanced and stable than Jython. But the Jython folks are quite capable for continuing to kick ass, so that will improve.
I wouldn't say Ruby has lost just yet.