Since Basecamp got you into Rails, allow me to use that as an example
of why your fears are overstated. Basecamp is currently running on 2
1/2 servers and doing more than half a million web requests per day.
More than a hundred thousand people have access to the system (people
!= paying account, 1 account = 1-X people). It's not even using
page/fragment caching. Bar some slight issues with MySQL lately (which
appear to be largely about configuration), we're scaling very, very
well.

But, but, you say. This is Basecamp and done by the author of the
framework. Can anyone else duplicate that? Why yes. The Robot Co-op is
pushing upwards one million web requests per day. They have close to
100,000 users. They do this across 3 servers.

So people are making Rails scale to fairly big numbers on fairly small
server farms. This of course doesn't necessarily mean that _you_ can
make _your_ application scale to what you need. Just that its unlike
to be the framework holding you back.

As far as AR being more inefficient than stored procedures: 20% of
your app accounts for 80% of the load. With Active Record, you get to
complete the 80% of your application where performance isn't critical
really fast, and then you can take your sweet time optimizing the last
20%. This is much preferable to using the same heavy-handed approach
on 100% of the app.

Platform independence: There's nothing inherently platform specific in
Rails. Yes, Rails is part of an open source ecosystem that from time
to time require you to compile things. Compiling things on Windows is
some times more inconvenient than on OS X and the 'nixes. But Rails,
debugging with breakpoints, etc, is all platform independent.

But each his own. If you don't think Rails is considerably more
productive for you than .NET was and if you still want to retain the
development style (using stored procedures and whatnot) you were used
to in MS-land, then perhaps Rails isn't the best fit for you. I think
Rails offers a strong case over MS tools even on an MS platform, but
it's obviously an even stronger case if you're also interested in
using the rest of the open source stack (mysql/pgsql, apache/lighttpd,
linux/freebsd, etc).

In conclusion: Rails has been demonstrated to be scalable for a good
number of applications at the size you envision. So that's unlikely to
be your problem. But the cultural fit may be better somewhere else.
And you should definitely pay attention to where the cultural fit is
strongest. In the end, you need to be a happy programmer to be a
productive one.
-- 
David Heinemeier Hansson
http://www.loudthinking.com -- Broadcasting Brain
http://www.basecamphq.com   -- Online project management
http://www.backpackit.com   -- Personal information manager
http://www.rubyonrails.com  -- Web-application framework