XHTML 2.0 had some good ideas, it wasn't all "fantasy land", and WHATWG still picked over the corpse of XHTML 2.0 and added some of them to HTML 5. XHTML 2.0 was never truly finished so we have no idea what the final product would have looked like if the browser implementors had actually contributed back into the process instead of going off in their own direction.
How can W3C be relevant if Google develops the roadmap for Blink?