I have no idea why THIS vulnerability is getting so much attention. There have actually been OTHER Raisl vulnerabilities in the past 6-8 months which were _more dangerous_, but did not really get attention.
The Rails team did NOT help by being very vague about the nature of the problem in their announcement. I imagine they were trying to not reveal the method of exploitation; but it has just led to the current hysteria instead. They would have been better off being taking the extra time to be fully transparent about the nature of the vulnerability -- developers need to know to assess their own risk, as well as to judge the quality of Rails (how stupid was the problem exactly, what does it say about Rails etc?), etc. By being vague about it, Rails core team has just led to everyone assuming the worst, and the current weird hysteria.
Yes, it's a vulnerability which COULD be dangerous, and it's hard to tell FOR SURE if your app is vulnerable (perhaps due to code in gem dependencies), the only safe thing to do is update to a patched version. But the chances that your app is vulnerable are pretty small (if you aren't using AuthLogic; if you are, you can update auth_logic and fix it whether or not you update rails). And past recent vulnerabilities which were actually MORE dangerous have not received this level of attention.