I’ve spent a lot of time in the past few months simplifying and streamlining things. It amuses me that your first thought was that the configuration was incomplete - trust me that part is correct.
Your problem is with the assets:precompile step. Typically this is due to not having access to some secret that turns out only to be needed at runtime. The next step is to look at the logs to identify the true error. See: Existing Rails Apps · Fly Docs; generally accessing the logs from the monitoring tab on the dashboard produces better results.
Also take a look at ERROR [build 9/9] RUN SECRET_KEY_BASE=DUMMY ./bin/rails assets:precompile when running fly deploy - #3 by munandres for what might be a similar situation. If you have an initializer that accesses a credential that is only needed when you deploy, add an if statement around that code.