What are the technical reasons why languages like Python and Ruby are interpreted (out of the box) instead of compiled? It seems to me like it should not be too hard for people knowledgeable in this domain to make these languages not be interpreted like they are today, and we would see significant performance gains. So certainly I am missing something.
Several reasons:

faster development loop, write-test vs write-compile-link-test
easier to arrange for dynamic behavior (reflection, metaprogramming)
makes the whole system portable (just recompile the underlying C code and you are good to go on a new platform)

Think of what would happen if the system was not interpreted. Say you used translation-to-C as the mechanism. The compiled code would periodically have to check if it had been superseded by metaprogramming. A similar situation arises with eval()-type functions.  In those cases, it would have to run the compiler again, an outrageously slow process, or it would have to also have the interpreter around at run-time anyway. 
The only alternative here is a JIT compiler. These systems are highly complex and sophisticated and have even bigger run-time footprints than all the other alternatives. They start up very slowly, making them impractical for scripting. Ever seen a Java script? I haven't.
So, you have two choices:

all the disadvantages of both a compiler and an interpreter
just the disadvantages of an interpreter

It's not surprising that generally the primary implementation just goes with the second choice. It's quite possible that some day we may see secondary implementations like compilers appearing. Ruby 1.9 and Python have bytecode VM's; those are ½-way there. A compiler might target just non-dynamic code, or it might have various levels of language support declarable as options. But since such a thing can't be the primary implementation, it represents a lot of work for a very marginal benefit. Ruby already has 200,000 lines of C in it...
I suppose I should add that one can always add a compiled C (or, with some effort, any other language) extension. So, say you have a slow numerical operation. If you add, say Array#newOp with a C implementation then you get the speedup, the program stays in Ruby (or whatever) and your environment gets a new instance method. Everybody wins! So this reduces the need for a problematic secondary implementation.
Why is (python|ruby) interpreted?