I agree with all points that Xander was in the wrong here and his arguments were of course hypocritical.
But in Xander's defense, Buffy was going to kill the woman he loved. I think, as an audience, we'd have all been puzzled and sort of disgusted with Xander if at that point he'd thrown his hands up and said, "eh, ok, you're right. She is killing people and needs to be stopped. Just give me a sec to say goodbye, ok?"
This is sort of a parallel to Buffy's reaction to Giles in the same season. The main difference of course is that Anya was killing voluntarily and I'd argue with every fiber of my being that Buffy had reason to kill her as opposed to Giles trying to kill Spike who wasn't aware of what he was doing. But the point is: all rational thought and consideration goes out the window in both cases when someone was trying to take out the person they loved. Xander's argument was flawed, certainly, and his assertions were wrong. But as I said, what would we have had him do instead?
