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Bitcoin can't validate the Counterparty invariants, thus Counterparty can't have decentralized consensus. Sorry you can't put smart contracts on the Bitcoin block chain. Rootstock is making a side-chain instead.
But the larger issue is scaling. And also of course the fact that Turing-complete scripts can blow up. To solve this, you need me. I've been working on the technological issues for 2 - 3 years.
A side chain is the proper way to do this, and it can be merged mined with the main chain. Scaling as we both know is a very serious issue so one has to start with a base coin that can scale on the main chain properly even before adding smart contracts. Then address the scaling issues of the smart contracts themselves.