Why do you think you got rejected? It seems like a really good idea.
Just my 2 cents. The landing page looks great. Hope they can pull through.
To me EY seems like a much better version of Linode + install scripts that are targeted to Ruby users. Heroku seems to me more like Google's AppEngine, except much more expensive and without the autoscaling.
But on the other hand, Heroku doesn't solve every problem - here's hoping there is more room in the market!
Besides, one could argue that Google, Heroku, etc also sounded 'me-too'-ish.