He lost me at #1. Technically, there's so many things Rails and Ruby can do that PHP can't. If he means it pragmatically (they're both data/web connect-o-thingies), then he has a point.
Arguably, Ruby does things better/lighter/cleaner/more elegantly than PHP, but at the end of the day, they're both accomplishing the same business objective. And when the end result is the same, what PHP provides in the way of stability/industry uptake/user community/compatibility outweighs whatever gains in "programmer happiness" and all the other intangibles commonly flailed about by the Ruby/Rails community.
It's interesting that no one has a problem comparing a Framework to a straight-up language. You'll never get an accurate comparison this way and I think that's a huge point. Everyone marvels at what RoR can achieve in terms of logic/decision/data/presentation separation, but doesn't take into account that there are probably 20 or so PHP frameworks that also implement the MVC approach and do a lot of the same things while maintaining the flexibility of php.
However, I don't recall anyone in that community telling him that it might not be such a good idea.
Anyways, compare Derek's current observations with this: http://www.oreillynet.com/onlamp/blog/2005/01/cd_baby_rewrit...
and
http://www.oreillynet.com/ruby/blog/2005/11/migrating_to_rub...