Developer happiness aside -- there are plenty of folks who like JavaScript just as much as Ruby -- and assuming that we're talking about an non-public-facing app (like Basecamp Next), is there still an argument that can be made in favor of doing your UI on the server side?
Even just in principle, it can't possibly be close to as fast (client-side can render optimistically, where possible), and it can't be close to as flexible (you don't have a model of state on the client to perform logic with).
I think that the truth of this is already admitted in that the really fancy bits of UI are being implemented in JS: http://37signals.com/svn/posts/3094-code-statistics-for-base...