The thing about Rails is that it represents the maturation of web development. It's not anything amazing per se, just a clever roll up of the best practices that emerged from the decade of Perl, Java, PHP development that preceded it. Ruby is the secret sauce that makes things just feel so slick.
I don't mean to minimize the initial innovation, it's just that Rails is no longer very unique. A lot of frameworks have largely caught up even if written in less flexible languages, and long term I see opportunities for new frameworks to leapfrog Rails.
The biggest liability for Rails is the Ruby runtime. Yes progress is being made here, but it's still a pretty sad state of affairs with regards to memory leaks and performance. I bang my head up against this every few months and it really hurts.
Another issue is the need to handle more complex applications. Frameworks like Seaside allow you to set up complex stateful apps in a more robust way than will probably ever be technically possible in Rails (again due to limitations with Continuations in the Ruby runtime).
A related issue is the question of what dark places we will end up in over a couple decades of large code bases running under Ruby with no warnings. I think it's pretty clear by now that Java is an unnecessary straitjacket, but do-whatever-the-fuck-you-want-with-no-warnings-whatsoever Ruby environment is not necessarily the most conducive to long term stability. I'll take it over Java any day, but I still have my doubts.
Finally, there is the issue of increased ajax-ification of apps. Rails was a leader here early on insomuch as it provided proof of concept that Ajax could be done easily without a cross-browser-DHTML-guru certification, but 5 years later the Prototype + Rails helpers paradigm is quite dated. Ajax has huge potential for simplifying back-end code and making web apps inherently more scalable and performant. This is one area where Rails could re-invent itself, but a mature framework like Rails is going to have a disadvantage against a fresh approach starting from first principles.
In short, I think the competition has openings.