I think a too-complex API is better than a too-simple API. If the underlying infrastructure is too simple, then people have proprietary workarounds to get the features they need (see Kubernetes Ingress and all the vendor-specific annotations). If the underlying infrastructure is too complex... then implementation is harder, but at least you can do what you need. Someone else can smooth it over and give you a simplified version, if the subset you need is the same subset they needed.
This is always a spectrum, of course, and xDS is probably missing crucial features... but at least if it becomes somewhat widely used, there will be an incentive to add the missing features.