I agree it's taking a step backward in a pure technological sense. However, this step backward from Bitcoin is necessary to move everything forward.
It would only be a step backward if the IOU system was all there was, but it isn't, there is also XRP, which is a (small) step
forward compared to BTC. More importantly, the IOU system combined with the distributed exchange is a major leap forward compared to Mt Gox and its competitors. So in effect Ripple is a huge step forward, and not a step backward.
I don't think you were following the conversation... We were not talking about the IOU system or XRP. We were talking about the need for UNLs and consensus, which make Ripple servers totally dependent on a configured list of trusted nodes to fend off sybil attacks. Since XRP is just a unit of quantity that is being tracked on this weakened transactional system, how could you possibly call it an improvement? In addition, they decided to use a centralized model for distribution of XRP. How is that a step forward? Ripple transactions are dependent on the very weaknesses that Bitcoin was designed to overcome and ripple distribution is completely contrary to the goals of Bitcoin.