Yes, conceivably within a few years Ruby on Rails could emerge as a dominant web application development environment. But I am betting strongly against it. Why all the hype then? True innovation, great presentation, lots of screencasts & brilliant marketing. But in the end, RoR is fighting an uphill battle. E.G. LISP has a much greater market share than Ruby (.721% vs .2%).
Programming language market share numbers are taken from this study. It covers the languages in general and is not specific to web application development. If anyone has any better analysis please let me know.
*Update*: There is a great blogpost from a Ruby on Rails devotee here that comes away with much the same conclusion but instead of just numbers he provides a well reasoned argument.