The implication is that the programmer must know what is used internally, though, because things will go horribly wrong otherwise. That's a sign of a very leaky abstraction - if you need to know the format and behaviour of the underlying byte stream, you'd probably be better off using the byte stream directly, the abstraction is just introducing uncertainty where it should be isolating from such concerns.
It's also supposed to be an incorrect implication for Ruby most of the time. It should be possible to do a single encoding trivially (e.g., if all of your data is shift_jis or UTF-8), but rather than trying to (badly, and usually unsuccessfully) hide the encoding difficulties from the programmer if you've got mixed encodings, Ruby has chosen to be a little more up front about encodings.
The reality may be a bit differently, but I recall seeing an email message from Matz on ruby-core last year suggesting that it was supposed to be trivially easy to work with one encoding (specifically mentioning UTF-8, but implying others).
