Rails has its drawbacks. Ruby is slower than most other languages. This is likely to change with the release of new versions, but at the moment this drawback is critical for those applications that value processing time. In reality, this is not a problem for most websites.
There is also a problem with hosting Rails applications. Due to the size of the Rails framework code, it must be kept in memory at all times and loaded in response to a request. You need 100-200 MB of internal memory to host applications even with low traffic. By comparison, you can place PHP applications anywhere you want because they don't take up memory when they're not available.
Because of these server requirements, finding shared hosting for Rails applications is usually quite problematic. VPS (Virtual Private Server) is the best choice. Server setup is more complicated than for PHP. But now there are many Rails-centric hosting companies that provide turnkey solutions.
Another result of these server requirements is that Rails hosting tends to be more expensive than other platforms and languages.