It's funny how everyone's first instinct is to try to "hack" it. Check out all the replies, everyone's trying out infinite loops, shell commands, fork bobs, sandbox breakers. Freedom to tinker all the way!
Agreed, pretty clever way of getting some serious penetration testing done.
By the way, apparently this snippet does the trick:
@rubx f = Hash.new {|h,k| h[k] = h[k-1]+h[k-2]};f[0]=1;f[1]=1;f[1000000]
It looks like it calculates the 1,000,000th fibonacci number, with decent runtime complexity (not so much with memory). I don't know Ruby though, is there anything peculiar about the snippet?
I think it would be harder to stop the near infinite loops / long running calls than it would be to make it secure in terms of file access and user escalation.