I suspect you are very right Anand. It seems likely that the speed of the 
RAM is going to play a huge part as well. I didn't mean to suggest it was 
an apples to apples comparison, just proposed it as a curiosity.

If I was going to use the Pi as a web server so that it could perform a 
task in and of itself I would likely choose something like Tornado paired 
with webapp2 instead of dev_appserver. But the fact that you can develop 
huge scale web applications on such an inexpensive device is kind of cool. 
It's kind of like running a web server on an iPhone: it is not very 
practical, but it is cool. Actually, now I want to run dev_appserver on my 
iPhone....

- Bryce

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