Given what we know about program length vs bugs (it's pretty linear), I think it's a "technical merit" that Rails lets you write shorter, clearer code. In an environment where you're not sure what you're doing is going to go anywhere, and where you need to be able to turn on a dime, shorter, clearer code is also going to be an advantage.
Why do you thing startup is using Rails? because they want to get rich fast by throwing their simple products faster.
People can't wait for 8 months to see their work comes to fruition.
Basically it's human nature to like Ruby on Rails, not because of the technical merit.