Yes, DSLs are often implemented using other languages. Tcl, ruby, groovy, and many others are very good for creating DSLs. A simple DSL can be developed in a matter of just a few hours or days in many cases.

A lot depends on he “D” — the domain. If you’re writing a DSL for financial traders, you might write it in C to get high performance. If you’re writing a DSL for a testing framework or to describe a GUI, building atop an existing language may make more sense.

Other factors include whether this is a DSL that will be used daily by domain experts who have a specialzed vocabulary, or if it is for novices to configure a game once every few months. Will it be a commercial product or a freebie? And so on.

There are many, many use cases for small DSLs to be written on top of scripting languages.