That's true with any developer, but I have to say I have never really gotten good results with Xtol. The developer is ok, but I've always liked the look I get with D-76, Rodinal, and even Tmax Developer better. I use only distilled water for mixing my chemicals so water quality isn't my problem and I'm pretty sure my technique is fine. A lot of people like Xtol, but most have not done a lot of work with other developers to get a real feel for what else is possible.
I agree, except that I also think that most people who try Xtol don't give it its best chance to show what it can do - in my opinion, you need to use it at 1+3 or higher dilution, on the right films (ironically, and again in my opinion, it improves and changes the look of Kodak films much less than others) and experiment to get it right. I know you're a very careful worker Chris, so I'm not saying you haven't done that.
Xtol's sole advantage is its relatively low toxicity.
It's arguable that environmentally the most toxic component of these developers is the metaborate, making this a moot point, although everyone jumps up and down about the phenols (PQ, pyro etc). Xtol is certainly less toxic for the worker than phenol containing developers, but we shouldn't be exposing ourselves to photo chemicals anyway.
Grain is finer than D76 and speed is 1/3 stop higher with some films, but those are overshadowed by crappy tonality. Flat midtone gradation, which is not fixed by increased developing time, because then it blows out highlights.
In the end photography is an aesthetic pursuit, and in aesthetics anything goes and the very best aesthetic reason for anything is "because I like it that way". My main reason for using Xtol is that the curve shapes it produces with my favourite films work very well on my favourite printing papers _and_ those same negs scan well. With curve manipulation in Photoshop how the relative contrast throughout the tonal range is placed means little, I can manipulate a good scan of any one film to look like any other. The hardest thing for me is getting negs that scan close to or the same as how they print on silver paper. I can do that more easily with an ascorbate developer than with D76 or other developers. I use Xtol a lot because it is the most easily available ascorbate developer.
In reference to my environmental comments above I am increasingly working with developers that do not contain any phenol or borates.
This is all just opinion. use whatever you like the look of. you're only constarained by that and the law. Film developer is not a moral choice, or a religion, even if some would like to make it seem that way.
Marty