Why is Rails so far behind? 2.3 has been stable for months and we are still stuck with 2.1!

Find a repo with rails 2.3 and install the newer version.

Is there any benefit to the 2.3 version over 2.1?

There are tons of benefits of 2.3 over 2.1. The fact that you had to ask tells me you are far from the Rails world..
I want the latest STABLE version of rails included in Ubuntu by default, not in some repo somewhere.
thanks,

Yes I do not use rails, but there is this ideology in Linux that new users have that "later version number == better" which simply isn't true. This can apply to ANY app and is not rails specific.

The nature of Ubuntu allows you to add your own repos to get the apps you need. I'm sure you will have done it for other apps, why not this one.

You can propose this on the Ubuntu site for the next release. Maybe it will get included.

Yes this happens sometimes. We all have a slightly different idea of what stable means. If you really want to speed up the appearance of something in the repos then install it from from elsewhere (find the .deb on their own website perhaps) and then send in "bug-reports" which could be "feature-requests" or "wish-list" items, also try the ultra latest one and do the same, ie post a few bug-reports. This really helps the developers see the range of kit their project works on and perhaps iron-out any niggles. Once they've got enough "Ok's" from a wide enough range of machines and it's been running long enough 'in the wild' then it'll be moved into the repos. We each tend to support our own pet-projects and think our pet-project is 'the most important one in linux-land' and some people do a lot of beta testing for fun. (Obviously the main truly important projects are ones to do with Wine, multimedia and gaming ;) heheheheheh.) Anyway other ways to help the Ubuntu community ...
https://help.ubuntu.com/community/Signpost?action=show&redirect=HowToGetHelp

Good luck and regards from
Tom :)