You certainly don't need functional languages to write efficient server-side code for I/O-bound applications. People have solved the C10k problem for every imperative language I know.

Ryah (the nodejs guy) makes a pretty strong case that functional programming's parallelism doesn't help you on the server side anyway, because you'll need to scale across multiple machines. Multiple machines mean multiple processes. If you're doing that anyway, you may as well avoid threads entirely and parallelize by spawning a few processes on each server.

Games are the big exception, though I find it curious that I've never heard of any published game (big or small) that was written in a purely functional language. If functional programming really does make concurrent code easier to write, I'd expect at least a couple indie computer game developers to be using them, somewhere!

Anyway, despite how visible game development is, it makes up a small percentage of the computer industry. That we will experience 'The Downfall of Imperative Programming' because some day, I hope game developers use functional languages to make their games run faster is a bit of a stretch.

The ability of functional programming languages to do parallelization is really cool, but you're not solving a problem that many programmers actually have. Its like selling a car by saying it has lots of leg room for tall people. Its a great pitch to the right customer, but don't expect a revolution.