The major issues with scaling was that Ruby in general is absolutely horrible in managing memory, and was constantly having to be restarted. We ended up replacing the app with one built on top of Java which instead of requiring 6 servers with load balancer in front of it, to just 2 servers, one for the front-end and one for the backend. Java served the needs much better, faster, and didn't require the same amount of administration to constantly make sure that everything is still running properly.
Could the same have been done with Rails? Maybe. Are we happier with the Java based solution, its stability and speed? Yes absolutely.