You guys may sneer, but in a city like LA, where it's quite common to spend an hour or more in traffic each way, every weekday, a good driver's seat can be very important. My old car had an absolutely horrible one. Every day, after coming home, my back hurt so bad I could hardly walk around, and my legs compounded the problem, due to bad pedal placement.
As for issues like Style, handling, and the like not being part of the decision-making process, that's where you're wrong. The car is not at all designed to appeal to the normal car buyer. It's designed to appeal to the normal car buyer's son or daughter, or to a buyer at the very yound end of the normal spectrum. To someone like that, style is a very important part of choosing a car. Someone who would buy an xB is someone who would refuse to even consider a Hyundai or a Kia, or even one of the more mundane cars from the major Japanese manufacturers.
Toyota's goal was to make an affordable car that was desireable. The average young person doesn't want a Corolla or a Civic, but they'll get one, because it's economically practical. But the same person may well actually want an xB in the same way that they might want a Lancer Evolution, an Impreza WRX STi, or a 350Z, the difference being that they can actually afford the xB. They've succeeded admirably in creating the car, and have done quite well bringing the car to the US under the Scion name.
So, if the car doesn't have the necessary attributes to attract buyers, why has Toyota had to increase production to overtime to keep up with the demand for the car?