I still love Sinatra for back office and API stuff where you don't need to worry quite so much about authentication, exploits, web assets, permission hierarchies/matrices etc.

At the company I used to work for we built our invoicing system's API with it and it was fantastic, plain succinct Ruby with Sinatra, Sequel and not much else.

For public-facing apps that require signup, clever routing, image uploads and other non-trivial functionality, Rails definitely makes more sense.