Erlang/OTP is without any doubt a powerful tool. But as with any technology it's not good for any use case imaginable. It has a lot of strengths but some weaknesses too. Erlang glances in everything related to distribution and reliability. If you want to write software to be arbitrarily distributed over multiple instances, CPU cores, mashines or even data centers without having to change the programming paradigm for any particular case you probably have the perfect tool with Erlang. To benefit from Erlang you should have a problem best solved with a distributed solution. This may be reliable message passing or rock solid in memory storage but it is probably not web page generation and delivery.
In the Internet world, Erlang is perfect for middle ware or backend systems like caches, message queues and exchanges, databases or storage abstractions. But it is probably not the right tool to write web applications. Sure, you may add a HTTP endpoint to your message middle ware or database but should you use Erlang in a way one usually uses JSP or PHP or Ruby? Probably not. Web applications have a very short life cycle. The business rules are in a constant flow and have to be changed over and over again. To define such rules in Erlang may turn out to be a very hard job. Despite of its expressiveness Erlang is not the language to be used as an embedded language as for Yaws dynamic content or in ehtml. It works - but it is comparably hard to maintain and not that fast in terms of execution time.
It's not that Erlang is a functional language but it's a functional language with a special syntax. There are all those commas, semicolons and dots and a pretty verbose notation for associative arrays, the records. The benefits of the syntax as for example how you deal with binary data is of little use when programming the business rules of a web application. It's simply not designed for such a use case. It's designed for writing reliable software dealing with network communication and related stuff. But it's not made to express complex rules in a domain specific language.
On the other hand, the Erlang VM is highly optimized to spawn and execute a huge number of small processes but it's probably not optimized to execute a thread in the shortest possible time ever. Modern Java implementations may beat current Erlang easily. Sure, the maintainers of the Erlang VM do a lot of work improving both performance and SMP scalability but all those optimizations a not yet at the end. High performance is not the domain of the OTP.
When you ever think about using Erlang, the first question to ask should be whether your problem deals with either redundancy, scalability or distribution. Second is whether you not have to deal with high performance as well, and you should not have to deal with the low lifetime of business rules. If you answer these questions with yes you get a highly optimized and convenient tool for the job.
