I'm pretty sure they still use Rails for the HTML application that you see when you visit twitter.com - it's the backend stuff (the data storage layer, the message queues, the API etc) that's been ported over to Scala/Java.
Also who cares if Twitter had to move to another technology. 99.9999% of people will never ever have to face those issues.
Twitter would have hit the wall with any other tech, it just grew like crazy all of a sudden. The fact that it was able to get on its feet so fast though, that's thanks to Rails.
I think this whole "Rails doesn't scale" is the new "Java is slow". Baseless and ridiculous.