Removing Rails version from Gemfile causes Rails to be downgraded upon `bundle update rails`

Gemfile

source 'http://rubygems.org/'

gem 'rails' # was '3.0.7'

gem 'coercion', '0.0.2'
gem 'gowalla', '0.5.7'
gem 'haml', '3.1.1'
gem 'sass', '3.1.1'

group :development, :test do
  gem 'sqlite3'
end

group :development do
  gem 'taps'
  gem 'heroku'
end

group :test do
  gem 'faker', '0.9.5'
  gem 'machinist', '1.0.6'
  gem 'remockable', '0.0.6'
  gem 'rspec-rails', '2.5.0'
end

group :production do
  gem 'hassle', :git => 'git://github.com/koppen/hassle.git', :require => false
  gem 'pg'
end