Not
It uses the C crypt() library, which is based on DES. This is a fast cipher. one.
It is not ideal for hashing passwords. The algorithm is reasonable as a cryptosystem, although rather short in key length, which is a problem for passwords. However, he has an even more fundamental weakness: too fast.
Good password hashing features have a somewhat odd encryption requirement: they need algorithms that fundamentally require a lot of complex operations, and not just a few XOR operations and some table queries like DES.
This, incidentally, is almost always a bad idea to flip your own password system. It is better to use existing packages in theory that they are subject to consideration. In order to cook good, you need a certain amount of items.
And finally, you asked the question that our fearless leader here on SO wrote! See: The Dirty Truth About Web Passwords.
1. Note that even if it were implemented in Ruby, speed would still be a problem: it is a fundamentally fast algorithm so that an attacker could use his own implementation to search for keys.