So I decided to see just how much ram a million rooms loaded at once would take up, and it was about 500MB. Changing the room class a bit managed to cut that down by nearly half. Stil, there was one problem... forcing ruby to garbage collect is impossible and may never happen in the course of the interpreter's execution. So much for that language.
After a bit of discussion I said, "Screw it. Let's do it in Ada." User:Rsayers agreed, and so it was done. It's not a big loss as there's not much in the way of source code from the Ruby side of things. That being said, Ruby was a great learning experience on how to build a telnet server.