Ruby was never that great of a language. Rails was much better than any alternative, though, and it brought Ruby along with it. Basically every company using Ruby chose it because they wanted to use Rails.
The main thing that has led to the decline of Rails is the rise of no-HTML-just-an-API backends. Your web frontend development stack is more likely nowadays to be, first you pick between React or a similar framework, and then the backend just sends API data and doesn't mess with HTML. This makes for better websites, and it makes joint web and mobile development easier too, because you're going to have to build that API anyway for your mobile app.
The main thing that has led to the decline of Rails is the rise of no-HTML-just-an-API backends. Your web frontend development stack is more likely nowadays to be, first you pick between React or a similar framework, and then the backend just sends API data and doesn't mess with HTML. This makes for better websites, and it makes joint web and mobile development easier too, because you're going to have to build that API anyway for your mobile app.