When using the --properties flag to generate a base .jrubyrc, several properties default to null. This leads to lines like ir.passes=null in the file.
This seems to set the property to the string "null" instead of a null object which leads to jruby failing to run (at least in the case of ir.passes).
Commenting the offending lines seems to resolve the problem, but the --properties flag should probably generate those null properties as commented lines to being with.