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Panda updates have hit microsites where content across the sites was either duplicated or "thin", although thin is often in the eye of the beholder. Keep in mind, and I mean this kindly, that "unique" is not always high-quality, and the quest for technical uniqueness can lead to practices where microsites are just spinning out versions of content with slightly different keyword concepts or ordering, etc. In other words, it's technically "unique", but most people wouldn't view it as valuable. Early Panda updates did hit certain kinds of spun-off content hard, including geo-located content. In other words, you spun out your plumbing services page for 5,000 cities and it only differed by city names and a few basic facts (even if technically unique), that's definitely something Panda came down hard on. Truthfully, though, it's really tough to tell without specifics. I'm more on EGOL's side of the fence - my gut feeling is that 20 micro-sites is excessive and I'd strongly suspect quality issues. Some questions that might help you pin things down: (1) Has traffic dropped across the entire cluster of sites or just the main site? (2) Can you pin traffic drops down to any given date, set of keywords, or pages? Drill down as far as you can - that's always the most important first step, IMO. (3) Are some of your micro-sites essentially dead - no traffic or ROI? You might not have to go all-or-none here. Odds are that some small % of your micro-sites are creating a large % of your value (let's call it an 80/20 rule). It's likely you could kill 10-15 of them with very little harm - at least that's what I typically see. You don't have to drop all 20 cold-turkey.

I would contact the developer of the plugin for those types of questions. He seems very responsive to people's input on the discussion section of his plugin.  They do serve practical uses though, like preventing comment spam and such, plus your client has been specifically targeted in the past so it seems it is a value add moving forward.