I see how this is cool, but weren't we trying to separate style information from the program logic? ... This seems like a step back into PHP spaghetti code.
The style is applied through CSS. The CoffeScript is unobtrusive. The template and the sever logic are distinct (but there's an indentation error in the request handling code).
It's about logical, not necessarily physical separation. For small apps, having everything in one place is actually very convenient.
Yeah, but this only goes well for smallish projects. If you have files that start to reach 2000 lines, the last thing you'll want is a mixture of model, view, and controller logic in a single file. PHP had this back in 1999, and I don't think we want to go there again.
Project organization is your responsibility. How is this different from other modern frameworks? That CoffeeKup allows you to organize your projects as you see fit should be a point for its favor, not against.
(That is, unless you use Rails and believe in underlying organizational standards for everything. ;) )
It's about logical, not necessarily physical separation. For small apps, having everything in one place is actually very convenient.
See also _why's Camping: http://camping.rubyforge.org/ (nowadays maintained by judofyr a.k.a. Magnus Holm)