with all other issues of Ripple aside. why are they holding 20% of all the XRP? that alone makes me weary of using them
To make money obviously. If you think holding XRP yourself won't be profitable, then don't do it. You only need tiny amounts of it if all you want to do is to use Ripple as a far superior, distributed alternative to Mt Gox.
MT gox charges a 1 % fee. Ripple is not going to be a successful exchange while XRP remains as expensive as it is now or unless it takes less ripples to perform an exchange then it does now. Maybe I am wrong but it looks like it is much more expensive when you factor all fees to exchange on Ripple as it is on the popular bitcoin exchanges.