Why do people keep looking at it as an "Either/or" proposition?

I've had jobs where I used Perl, PHP, and ASP as the primary web language. However I've always found that knowing Perl and PHP complimented each other very well. Yes if you're going to write a web application that uses a database then PHP will the the primary if not the only language you need. However for most other scripting tasks and many other things that require programming, there is already a Perl module out there that does just what you need.

My current job about 80% of it is PHP and 15% is Perl (the other 5% is some combination of ASP, Java, and a few other languages). I wouldn't dare think to write that 15% of Perl stuff in PHP. It's either not a web application or I'd end up with 100's of extra lines of code and something that probably didn't work right. And just as I wouldn't think of doing the Perl stuff in PHP, I generally wouldn't do the PHP stuff in Perl (admittedly PHP is my default language and there are a number of things I could probably do just as well in Perl as PHP).

Bottom line is that no language will be the perfect tool for every situation (although Perl probably comes the closest). Therefore you're asking the wrong question when you ask things like "has the battle been lost?" The better question is "What tool do I need to do this task in a quick and efficient way?"