We have the same thoughts and issues.
After considerable discussion, we have so far elected to continue the rag service because it really is the best operational way to go. Paper type towels don't meet the need like rags.
The other thought is environmental concerns. Our past landlord was concerned about all this and went away happy after we explained the entire rag process.... End of concern and no problems there.
Not up to speed on the technicalities, but the rag service moves the environmental problems to that company. You pay for it, but problem avoidance is sometimes the best way and the cost isn't really too big all things considered.
We will probably re-think the issue if press operations continue to decline.
Hope this opinion helps.