First of all , it's not fungible. But bitcoin is fungible up to millionth. The basic criteria of a currency is not saisfied with nxt.
I don't think you understand what fungible means. Go look up the definition, or read the wikipedia article on it. Nxt is as fungible as Bitcoin. If, by "fungible", you mean "divisible", your criticism is also unfounded. The number of decimal places currently supported in the code is two, and it can easily be adjusted in future. The lead developers have already stated that they will increase the number of decimal places as value increases, but it is not an immediate priority.
http://wiki.nxtcrypto.org/wiki/FAQ#How_divisible_is_Nxt.3FA billions were released by an insider team via exchange even before the code was open sourced.
There was no "insider team". The release was publicly announced on this forum and everyone had plenty of opportunity to buy in before the genesis (and I wish I did!). The total supply of 1 billion Nxts were created at the genesis block, but that is because Proof-of-Stake coins MUST operate this way. Anon136's paper, which you clearly didn't read or understand, explains some of the huge benefits of this. The first code release was on Jan 3rd, and before that everyone had the opportunity to buy and sell Nxt on dgex.com. Now, after the code release, everyone still has that same opportunity. The reasons for a delayed/staggered code release have been much discussed, and I believe it is a necessary requirement for a truly unique offering in today's competitive market.