i've played xenophobe once. to get the achievement. decided that they are just gimped collectivist (they can even enslave, but the slaves are always unhappy even if they have same ethics as me). probably never will do it again til 1.5.
also they need to spend TONS of influence to deal with main species. and factions... and everything else. i was so glad when my Deneb were captured by enemy and i could declare war with the goal "cleanse it back"
ughprobably i'm not ready to let people migrate freely. yet. maybe i'll give it a try...someday.
also i guess i almost always have a point in a game where i stop colonizing and just start ceding new planets. and they are almost always full.
IMO lot of your complaints about xenophobe have less to do with the ethic and more to do with the fact that currently if you want to go wide, you *have* to pick ethics/gov types that help you mitigate ethics divergence (either by letting you stack -divergence effects or mitigating the effects of ethics-related unhappiness) or you are always going to be bleeding influence and losing productivity to unhappiness, whether you are xenophobe or not.
As for migration; Yeah, you have to be OK with pops leaving the buildings you wanted them to work, or your primary species being just the plurality (if even that) rather than the majority, but migration is just so good for starting up fresh colonies, since you're basically spreading out the growing of new pops out to several other worlds, some of which not in your empire, meaning it's not taking away productivity from elsewhere. As for running out of fresh worlds to colonize, ever since the habitability wheel got traded for the wet/dry/frozen system, most empires will only have one or two types of worlds in their empire inhabited. In my experience, that usually means that even when I have to go to war to expand, victory usually nets me one or two extra worlds that I gain the ability to colonize in addition to my wargoals.