Turns out that I was calling the wrong 'sass' binary.
Instead of using my rbenv gem, I was using 'sass' from '/usr/local/bin'.
I've deleted system sass. Now when I call 'sass' I get the version offered by the gem I installed via rbenv.
Yes, I know I shouldn't be deleting system binaries. It's a dirty, dirty thing to do. In the desperate case of removing system ruby from ubuntu, I think the measure is justifiable.