GM, the watt ratings on speakers are fairly meaningless. Theoretically, they could handle that much power continuously without going up in smoke, but sounds in home use don't work that way. Typically about 1 watt is used by a speaker for a comfortably loud average level, and while peaks on highly dynamic material use much more, this is only for a split-second, and speakers can handle much more than their rated power for this time. So, unless the level was extremely loud(and more damaging to hearing than to speakers)don't worry about the speakers with the VSX-820.
As to the sub, that wouldn't be a line-level RCA plug connection if it gets wired to the speaker output terminals on the receiver. Apparently it's a passive sub without an internal amp(does it get plugged in with a power cord?)which is powered by the receiver in parallel with the main speakers. The plug is a connection similar to a banana plug apparently, to make the connection easier.
Yes, the speakers and especially the sub could be improved, and although you don't give details, it wouldn't be surprising if even that Onkyo set was significantly better.
