Although the Reg sensationalizes the story, it's interesting to see how Ruby is in limbo. How much damage has been done to Merb by the 1.8 to 1.9 fiasco?
I agree that the Ruby 1.8 to 1.9 transition has caused headaches. But the 1.9 version does have some interesting features that have been long being cooked to get to this point, and perhaps more interesting is that the 1.9 version has motivated even more developments in Ruby-land as found in MacRuby that uses the 1.9 version or in yarv2llvm that recompiles the bytecode to llvm or something.
Let's say that many folks might have had higher expectations that have been hard to meet given the reality of it all.
The Merb guys helped with further explorations themselves which probably helped with making Rails advance more decisively, given the promissed "merging" of the Merb ideals with Rails.
Also, with things like Passenger, the deployment of Ruby met an all-time high in features.