If you run: xar -cf foo.xar /path/to/file, and extract it again, what do you expect to happen?
In all versions up to current trunk in subversion, xar would non-recursively archive path and path/to, so when you extract the above archive, you'd get path/to/file with all aspects of path and path/to preserved. Unfortunately, when path or path/to is a symlink, this causes problems. If path/to is a relative symlink pointing to path/from, and you extract the archive, it will fail to extract because path/from doesn't exist, and therefore can't create path/to/file.
With tar, path and path/to are not archived at all. The fact that file existed in path/to/ is preserved, but those directories are not archived. This avoids the problem entirely, although might not be what you're thinking of when you type tar cf foo.tar /path/to/file.
One alternative to tar's approach is to have a flag to xar that tells it to treat symlinks to directories (xar knows what type of file a symlink was pointing to at the time of archival, if anything), and extract it as a directory instead of a symlink. However, this is problematic in the case of xar -cf foo.xar /path/to/dir, where path/to/dir/link points to a directory, but you wanted to preserve the symlink.
It seems tar's approach makes the most sense here, and it's hard to go wrong following the behavior of such a well established and well known tool.