Using Direct3D 9 for ongoing XP support is absolutely fine. Just dropping support would be a huge "f___ you!" to the customers, and losing hundreds of users for a new API without any visual improvement would be a stupid decision.
D3D 10+ may not be an improvement for the users, but for the programmers: D3D 10+ programs tend to have less code because
1) you don't need to handle corner cases like losing GPU context ("lost device" is impossible),
2) there is far less control flow (because a minimum feature set is guaranteed, no capability checking or workarounds for old GPUs or broken drivers), and
3) there is less code in general (instead of setting hundreds of render states one at a time, state blocks must be used).
So while I agree that D3D 10+ is currently useless for LFS and sticking with D3D 9 is totally right, I disagree with Scawen in that it's just a hype – if you don't have XP users, it can significandly reduce your code base and your test cases, which is a blessing for any programmer. It's sad that they had to drop XP support for D3D 10, but the decision was absolutely reasonable.