No XZ included in the current build, for those reasons. OTOH LZO is there, since it comes "for free" (it's required by zram and zcache).
Including xz or lzma support in kernel's squashfs to me would present only advantages:
tce-load would transparently handle both zip and xz tcz modules without no added work needed.
You would get more possibilities for free, without having anything to lose.
Official repository modules would still be zip, but custom modules could be packaged in xz if a user needs more compression.
What is the problem, seriously?
Or am I missing something? Maybe kernel with xz support has big size increase/performance loss?