After attempting the distribution of a command line application via Rubygems I came to the following conclusion: Any application not intended exculsively for Rubyists should not be distributed via Rubygems.
That is definitely an option, and it is essentially what we did for our linux support when we were building out a cross platform toolchain for mobile games. The tricky part was supporting Windows, Linux, and Mac all at once. Again, not suprised that distribution was hard, there were just a couple things that made distribution in Ruby a more painful experience
Another option could also be to convert gems (and dependency gems) to deb or rpm packages https://github.com/jordansissel/fpm/wiki/ConvertingGems
As far as I know, the Foreman project utilizes this approach http://deb.theforeman.org/pool/precise/stable/f/foreman/