The Xenosaga interview was before the release of Xenoblade 3 which further boosted the popularity of the series. Whats weird is that Namco is now 'remastering' Baten Kaitos instead.
Chrono Cross got a 'remaster' and that only sold 1.5 million units, Xenogears sold 1.19 million units, it was going to get a sequel before Square blew their load on that bad CGI Final Fantasy movie. I think they are afraid to do anything with it because it could be controversial, or there might be legal ambiguity with the games that came after it or something. Or it could be them afraid of releasing it because of the second disc, or they could just not care.
Yasunori Mitsuda was the only one who actually cared about the game enough to get Square to let him host the 20th anniversary concert, and he had to practically force them to let him master the audio himself; look at other Square concerts, they are poorly mixed an in stereo, while the Xenogears concert is mixed in lossless 5.1 and sounds great (Chrono Cross concert as well, but thats also much smaller scale than the Xenogears one, just a small band instead).