Indeed. This is something I considered. But Rails support is growing more ubiquitous, particularly with the rise of VPSs. And even if a hosting provider doesn't explicitly support Rails, it's often possible to install Rails nonetheless.

The biggest missing ingredient is a one-liner installer for all the dependencies. Installing Rails, the MySQL gem, and Passenger on a fresh server is not terribly hard for an experienced Unix user, but it is quite intimidating for casual users. So one of my goals for the project is to create a "worse is better" Rails installer. I.e. a really quick-and-dirty script, bundled with the CMS, which gives you a minimal Rails/Passenger/MySQL environment. It would be optimized for issue-free installation on a variety of hosts, rather than for bleeding edge features or maximum performance.

There's no doubt whatsoever in my mind that WP's popularity is joined at the hip with the availability of cheapo LAMP hosting.