I don't think 20,000 is bad at all. There are a decent number of baseball teams that can't draw that many, even with a much larger fan base. Besides, few of the stadiums in Europe are much larger. You can't judge MLS against the EPL, because their attendance dwarfs everyone else's to begin with. ManU has the 70,000 seat stadium that sells out and 19 of the 20 teams averaged at least 20,000 last year. However, only half the teams in Spain and Italy were over 20,000; Germany got a boost from all the new construction needed for the World Cup; France only has 8 teams over 20,000; Holland only has four.
We compare MLS to the Scotish and Belgian leagues and they only have two teams each with facilities big enough to hold significantly more than 20,000. Most Euro clubs outside the Champs League elite have a capacity between 20 and 30 thousand. Our stadiums and attendance are pretty close in line with those of comparable leagues in Europe.
Football is a lot like hockey: even if you could sell the seats, you don't want it in an arena of more than 25,000 or so because the view from too far away just sucks.