Thing is with xcp is they are just arbitrary tokens and completely unnecessary, correct me if Im wrong but I seem to remember when researching when counterparty was first announced that the XCP tokens were a) not needed and b) essentially worthless.
Not sure what you mean.
XCP is a protocol on top of Bitcoin protocol, an additional layer that runs a decentralized exchange. An exchange needs its units of accounting. Do you mean Bitcoins could be used for that directly? Perhaps, I have no idea. The Counterparty developers chose to use their own token, does it matter what token is used? It's a functional exchange, but like I said it's slow and like superresistant added, it may be vulnerable to Bitcoin's flaws as well as its own.