Counterparty vs. Mastercoin: I am invested in both, and I think the space is big enough that we don't have to pick sides. But calling Counterparty a "copycat" isn't a good criticism, since Mastercoin is open-source (which is very important!) and it's not really about who came up with the ideas first, but who is implementing them more quickly and effectively.
I agree it's very good that Mastercoin has institutional investors, but it's not only about how much money you have backing the project, it's also how many features you have, and Counterparty objectively has more features right now. Actually, you don't want the money to get too far ahead of the project, or else there will be a more drastic reaction if the project fails to make good on what it promises.
Calling Counterparty a "copycat" is calling it as it is. They've copied Mastercoin down to smallest details and Mastercoin's idea of using BTC blockchain.
I agree that space is big enough to allow for more competitors to emerge and competition is healthy.
Please name these specific features Counterparty has right now.
With Counterparty you can create assets, make bets and contracts for difference, and you can trade all assets, not only XCP and BTC, on the distributed exchange. According to Mastercoin's timeline, they only expect to have user-created assets by the end of Q2, and I don't know when they plan to have bets and contracts for difference implemented.