ISP's tend to make upload speeds very slow since most of the time people are downloading. 2.5Mbps isn't very fast and is easy to saturate as you found out. When downloading, the TCP/IP protocol requires an ACKnowledgement for each data packet received. It's hard for your computer to ACK when you've satured your uplink with a youtube video.
This is why when using a bittorent client they recommend you restrict your upload speed to 80% or less of your total upload speed, so that there is overhead to ACK packets. If you can, set your upload program/FTP/whatever you use to only use 80% of your upload bandwidth.