The reason the cooler is small is because the CPU doesn't put off much heat in the first place. 55c is an underclocked IDLE temperature, with the stock cooler and stock clocks the I5 shouldn't even reach 55c at full load.
Yeah and I really laugh at whoever said that if the CPU boots it's not bad. RMA it before it's too late. They only give 30 days on CPU's usually.
OK to the OP- Feel the heatsink, does it feel very hot to the touch? 55c is very hot. Is yes, that means the thermal paste is doing it's job and transferring heat to heatsink just fine and your chip is just running insanely hot. If the heatsink still feels cool, or relatively only barely warm to the touch, than your paste and/or application of the heatsink is actually at fault. So, if the heatsink is indeed very hot to the touch, I HIGHLY suggest you RMA the cpu immediately because newegg only does exchange for 30 days.