I agree, there is some confusion as to what's being discussed. There are 3 separate entities -
The Digital Government blog. Hosted on Wordpress.com using a 50quid template. No issues there!
The e-petitions website, which is a reinvented wheel that does less, but at far greater cost, than an already available off-the-shelf open source offering, (but hey, it uses Ruby)
Alpha.gov.uk, which can't decide whether it's a lab for website consolidation, or a prototype for garnering feedback on the UX, but does neither job very well (but hey, it uses Ruby and etc, etc)
By the way, to all those who comment that they can host their website for (some paltry amount)/month... come back when you've built a real website where you care about resilience and data integrity, and have to interface with some unfriendly core systems. Until then, clam up.