No, not at all. Well, people do use it for development, but it's pretty much the recommended deployment option for several Python web frameworks, including Pylons.
"There are lots of ways of deploying an application, one of which is to use the paster serve command which takes the configuration file that has already been used to setup the application and serves it on a local HTTP server for production use."
I've spent a good year developing with Pylons and this question of recommended production setup comes up about once every couple months in the official mailing list. Paste is considered by far the worst option in terms of performance, which is why most devs go with Apache/mod_wsgi. Nobody recommends Paste. Some (in my case) deployed with nginx/uwsgi.
The official docs recommend Paste. We've had apps in production running on Paste since 2007. At the time, neither mod_wsgi or uwsgi were around. Certainly it may not be the best way to run in production, but it's not for development only.
