node.js script fails at high concurrency levels - apache

Question

I've written a very small nodejs script. Nothing fancy, just listen to a request, generate a big random string of 108KB, perform an i/o by writing it to a file, then reading from it.
And then finally, put it back on the response stream.
The idea is to benchmark node.js capabilities against other systems like lamp/asp.net for a web app I'm going to develop:
//server.js
var http = require('http');
var server = http.createServer(handler);
function handler(request, response) {
//console.log('request received!');
response.writeHead(200, {'Content-Type': 'text/plain'});
s=""; //generate a random string of 108KB
for(i=0;i<108000;i++)
{
n=Math.floor(65 + (Math.random()*(122-65)) );
s+=String.fromCharCode(n);
}
//write s to a file
var fs = require('fs');
fs.writeFile("godspeed.txt", s, function(err) {
if (err) throw err;
//console.log("The file was saved!");
//read back from the file
fs.readFile('godspeed.txt', function (err, data) {
if (err) throw err;
result = data;
response.end(result);
});
}
);
}
server.listen(8124);
console.log('Server running at http://127.0.0.1:8124/');
The above works fine and returns the string when I open it from a browser. But when I run the apache benchmarking tool over this (with 2000 total requests and 200 concurrent requests), about 911 requests are shown as failed meaning something is wrong with my code:
Concurrency Level: 200
Time taken for tests: 41.887 seconds
Complete requests: 2000
**Failed requests: 911**
Can you help me figure out what is wrong with my code?
(Apart from these failed requests, node.js is excellent at performance considering the time total taken compared to other systems.)