Exchanges hold the REAL ASSETS, of their clients. Let their clients trade them. Then later distribute them back to their clients. Only one entity must be trusted in this case; the Exchange.
Where as on Ripple there are at a minimum of two Gateways that must be trusted, and that's at a minimum, to get the real underlying asset cleared and home. And that's in the best case situation. If one extends any trust elsewhere on the Ripple Network then suddenly one can be held fully liable for any of those trusted and their failure to own up to those IOU's.
Nope, this is plainly wrong - there are gateways (like Bitstamp) that issue several currencies e.g. USD and BTC. Also you are NOT going to be out of money if some other gateway you don't have anything to do with fails. You probably misunderstood how Ripple works, if you trust a gateway that has no trust lines to ripple to other gateways (and why should they?!) this is a closed ecosystem to trade. The advantage of Ripple is that you are free to open it for you, e.g. you can easily trade for other balances and you are not locked in to the one you first used.
Gateways also hold the REAL ASSETS of their clients, that's all they do - they let them use these assets (to be traded or transacted) on Ripple instead of forcing them to use their own (mostly) closed source opaque trading engine, that's the only difference to a Bitcoin exchange and that does not have to do anything with how the assets are represented.
Ripple can be maybe more easily understood as a competitor to BitPay: You trust a gateway (e.g. BitPaygateway) in a single currency (e.g. USD) and set up a way to deposit/withdraw this (e.g. you tell them your bank account). If someone wants to pay you, you will receive USD by BitPaygateway, not the BTC (or EUR or LTC or...) the person used to pay you. To pay you, in BitPay the payer has to trust BitPay with her BTC ("Pay 0.01 BTC to this addresss to send x USD to $Merchant: 1asdfg...") and also accept their market rates. In Ripple she only needs to own a balance that can somehow be traded for BitPaygateway USD and can optionally set trading offers herself if she doesn't like the current market situaion and thinks someone might rather take her offer. To make this trade you don't need to trust BitPaygateway for USD by the way...
Anyways, as I said, Ripple is not that easy to understand and there is a lot of misinformation around. Your understanding is simply wrong (or only partially correct, to put it in kinder words). If you want to talk about facts, the ones you stated above are simply not true. You do not have to trust any gateway to trade on Ripple. You do not have to trsut more than one gateway to deposit/withdraw anything on Ripple. You cannot be defrauded for more than you trusted a fraudilent entity (in Bitcoin terms: Even though pirateat40 had probably a debt of several million BTC but only a few 10k in "real" BTC, this did not affect the amount of BTC people had displayed at MtGox at that time) and Bitcoin exchanges do trade, transfer (in some cases), issue and redeem IOUs. Ripple gateways only issue and redeem them, they are traded and transferred on Ripple.