The Base Reserve is a minimum amount of XRP that is required for every address in the ledger. Currently, this is 20 XRP (20000000 drops).
It might be lowered when the next version of Rippled is released, I heard rumours about lowering but I am by far not sure.
I think it is actually low at this moment (don't shoot me). By the way, I run a validator and maybe I am doing something wrong (it runs just fine and performs perfectly, and it costs me money each day to do this for the ecosystem) but I am not receiving fee's for the created accounts.
The XRP Ledger applies reserve requirements, in XRP, to protect the shared global ledger from growing excessively large as the result of spam or malicious usage. The goal is to constrain the growth of the ledger to match improvements in technology so that a current commodity-level machine can always fit the current ledger in RAM and the full ledger history on disk. The XRP pays for the space in the ledger. 1 XRP would make it too cheap to fill the ledger with junk, allowing you to make other people store and transfer information for no reason.
The Owner Reserve is an increase to the reserve requirement for each object that the address owns in the ledger. Currently, this is 5 XRP (5000000 drops) per item, they are also known as trustlines. This can be refunded when you stop the trustline. However refunding the 20XRP is a different story. If the account is deleted, there's nothing to prevent the account from being re-created. The account must remain in the ledger to hold the information that the transactions have already been applied. there could be a feature added to completely delete an account and return the reserve to another account. The problem with doing this is that if funds are ever sent to the deleted account's address, the account would be re-created. Nothing would reliably prevent someone from replaying the account's previous transactions to consume those funds.
If the ledger grows too fast and too many people have the chance to open accounts, it won't benefit the network and will cause extra costs for the nodes. That is why we have the TAGS. If everything will happen on-chain and with seperate accounts the ledger won't be able to serve the whole world. We need to use payment channels and extra layers eventually. Although I would like to see it lower, I have absolutely no problems with it being 20 XRP. Since you have been around for a while, you'll probably know the goals of Ripple the company. The XRP ledger is open source but it does not mean that every inhabitant of this globe should have an own address on the ledger. It is ment for the payments industry, not for Henk and Ingrid.