In fact, not only *can* they crash the XRP market, they will, repeatedly. As long as the giveaways continue happening, XRP will be seriously hampered as a store of value. This is one of the reasons the pre-issue doesn't bother me too much: unless they're lying about how they plan to distribute XRP, it will be difficult for them to make much money by cashing out. Their stated intentions making Ripple free to use as long as possible for as many people as possible are incompatible with making a quick buck off of the pre-issued XRP.
Yes, precisely. That's why I'm wide eyed at some people paying up to 4 BTC for 50kXRP.
The purpose of XRPs is not to become a store of value. It's purpose is to work as an anti-spam fee token to make it more difficult to spam the network. Thus, they need to be cheap enough for pretty much anyone to be able to afford to make an account. Giving them out for free helps this as well as keeping a big portion of them for themselves, that keeps speculators in check somewhat (well ok, not the stupid ones)