I've always thought the automatic first down for defensive holding was a bad rule honestly. If it's that egregious than just call it as DPI (it's pretty much only called on players who are running routes anyway). If it's not that egregious than 5 yards is enough.
I don't necessarily hate this rule yet though, onside kicks are so few and far between and are even more rarely recovered I think exploring a new avenue for a team to get the ball back is probably a good idea.