Because it has pretty significant memory overhead, and because its runtime performance usually isn't better than compiled C or C++ code.

Yeah but in high performance web app the real competence for C and C++ are JVM languages (Java, Scala, etc.), not Ruby and Python. Twitter switched from Ruby to Scala/Java because Ruby performance was terrible.

Could they have used C/C++ for better performance? Yeah, but Java was goodEnough and for most high performance web apps it is GoodEnough, the cost being some more money for hardware (for Ruby and Python the cost is a lot higher and sometimes not even with expensive hardware you can solve the problems):

http://c2.com/cgi/wiki?GoodEnough

Just like C++ became GoodEnough and people switched to it from C for high performance apps, just like C became GoodEnough and we switched from assembly to C.