Crits DEFINITELY increase based on your performance. That's a fact -- I frequent the steam forums, and try to keep up on all published information regarding TF2. However, I haven't seen anything published or official stating how high the modifier goes (I doubt it's higher than 20% - certainly not 50%.)
weapons have a 5% base chance to crit, that's a fact. Melee has a base 20% chance to crit, that one may go as high as 40 or 50 percent, but that's my own speculation.
Also, I've seen two incorrect amounts of damage for a crit rocket in this thread: one person claiming they do 200, another that they do 195. A crit rocket (direct hit) does 270 damage. Crit stickies do around 330-350 damage, enough to kill anything but an overhealed heavy.
I think demomen are the most OP class, but not in a game-breaking way. I wish Valve had made stickies less of a "main weapon" and more of the "trap weapon" that I think they intended it to be, but I doubt they'll change it now. Good demomen can win any assault/defend style map.