If this comes to pass I will be completely and utterly stunned. I don't expect to be stunned.
You do know that PHP usage has continued to increase, all throughout RoR's rise to prominence (and subsequent fade in prominence as Django, Erlang, Haskell, Scala, etc. shuffle in and out of the spotlight), right?
There are more PHP developers today than there were three years ago when Ruby started getting folks attention. Book sales are up for PHP while they're down for Ruby, etc. I'm not at all suggesting that RoR isn't awesome or that it isn't alive and well or anything of the sort. I just know the reality of the market. We have thousands of web developers using our software...and I can assure you that the vast majority are working in PHP, despite the fact that we went to great lengths to add a nice RoR environment a couple of years ago (we also added some Python niceties, but it aint exactly mainstream, either). In fact, I'd probably even go so far as to say that more new PHP developers came into existence during the rise of RoR than new Ruby developers. So, not only do I think Ruby on Rails won't surpass PHP eventually, I think it's been falling further behind PHP all along and will continue to do so, just like most languages in the web space.
I don't have to like PHP to recognize this. Believe me, I don't like PHP. But, I'm not going to bury my head in the sand and pretend like it is anything but a massive phenomenon. It's simply the unstoppable juggernaut of "worse is better", when it comes to web software development. Will PHP eventually die? Sure. But it's not going to be killed by Ruby on Rails.
Funny, I think the same about Ruby/RoR, it just seems like a perfect crowd/match for "web designer turned scripter" mindset - looks like it is marketed to the same crowd too. PHP mostly marketed itself to "script kiddies", albeit not on purpose. It gained a huge following, and with it came lots of inexperienced kids that could "do stuff" easily. Mainly installing phpNukes, at the time, and modifying phpBBs etc. To say that Rails requires more programming skill than PHP is a moot point considering that developing web application, whatever the nature, could be done in both Ruby/Ror or PHP (with from scratch work or some framework) - thus it relates to the same problem set. Why would solving the same issues in one language/framework require a larger skill set then? It is as if you are saying RoR programmers are l33t, PHPs aren't - which doesn't make any sense, because I believe there are many great programmers and programs written with both.
And that is probably one of the greatest strategic weaknesses of Rails - it will be used by those who shouldn't use a web framework, who will make every silly mistake and that could tarnish Rails reputation beyond repair.
It all depends on who you want to build your web applications, the guy who knows how to build them or the guy that knows how they should look.