The problem is not that the X-type is a rubbish car, because it isn't, in fact in many ways it's very good. The problem is that it isn't a proper Jaguar. As capable as the Mondeo platform is, it's still a Mondeo platform - i.e not a Jaguar platform.
Platform aside, Jaguar should never have entered this market in the first place. Ford, in its infinite wisdom, decided that Jag should become a mass market manufacturer - this meant producing a 3 Series/A4/C Class rival. Jaguar are a luxury brand and entering this market only served to damage this 'luxury' image. Jaguar have since admitted this and as a result the X-type isn't being replaced. Instead, Jag are focusing on producing proper, British, world beating luxury cars. Now, in the post-Ford era, they're no longer trying to compete with the Germans in terms of sales, because that isn't what Jag is about.
The X-type is a reminder of the Ford owned, mass market, sales obsessed era that Jaguar unfortunately passed through. I certainly wont be mourning it.
Edit: The other mistake, as others have said, was Ford playing on Jags heritage. The X-type looked like a scaled down XJ and just as old. Then along came the new XJ and (despite being incredibly modern underneath) looked exactly the same as the old one. The S-Type looked like it came from Victorian times. And why all this oldness? Because of some moronic Ford execs who thought it would be a good idea. Sigh. Now that Jag are free of Ford they're producing some of the most modern (both mechanically and asthetically) cars on sale.