Ruby by itself is not better than Java or PHP. Ruby is just a general purpose computer language. Each Language has its advantages and disadvantages, that's why it is according to the project you will undertake you should choose the better language that suits your needs.
For myself, I use Ruby in Web development. Cause the web development is very dynamic, every day you have new requirements that's why I prefer to use a language like Ruby that's make me develop more with simple code, and most important I like Ruby's elegantly clever syntax.
But again without a great framework like RubyOnRails I wouldn't use Ruby. Ruby on rails gives you everything you need from the begining, so you do not have to prepare all your tools just to start. I mean when you start a rails project you will have a Object Relational Mapping, Unit testing system, URL Mapping, MVC structure, templating system, caching, Ajax, webservices, emailer, tasks runner, command prompt console, and tens of other useful stuff that you otherwise spend a considerable amount of your project time trying to setup if you don't use a decent framework.
That said, there are decent frameworks in Java and PHP that can do the same as Rails, like PHP CackePHP, and Grails for java. But It's Rails who get all the hype because it is the one who really made it eaiser for developer to make professional websites.
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This is a guest post from Sacha Greif, co-author of Discover Meteor and creator of VulcanJS and Sidebar.