Not if it's not sucking up giant amounts of your time (and if you're enjoying working on it). People will still be interested. Just perhaps not as many ;-)
I'd be interested in it -- i love having EM running in the web server...
The reason why EventMachine doesn't work in Phusion Passenger is probably because of forking. You can use the :starting_worker_process event in Phusion Passenger to reinitialize EM after forking (see the docs on spawn methods) or use conservative spawning.