Side chains are nothing new, and they have many limitations which make them unsuitable for our use in the short term. What's new here is the proposal for two-way pegs to BTC, which is a very interesting idea, but one that has no direct relevance to Counterparty, or the limitations of Bitcoin that Counterparty resolves.
We'll have to differ on this opinion. As I've stated multiple times in this thread, and to various counterparty and mastercoin people in person, there are significant advantages to doing asset issuance and distributed markets on a validated, merged-mined side chain. This is solving the same problem in a way that is better for the ecosystem. Although we're getting some press now, two-way pegging as a implementable idea has existed since at least December of last year, and distributed p2p markets over side chains was fleshed out in the Freimarkets paper six months prior to that. These ideas pre-date Counterparty and yes, they are frankly better than the unvalidated parasitic model. I will stop evangelizing, but I will be happy to answer specific questions.
I won't deny that there are significant advantages to doing asset issuance, etc. on a validated side chain. But there are also significant disadvantages. Both technologies are valid, in my opinion, and they don't solve the same problems (though something like Freimarkets, if it were created, would certainly be able to duplicate some of the functionality of Counterparty). I do disagree that side chains are better for the ecosystem, and also that the benefits of building on a side chain outweigh their significant costs.