It doesn't matter if both players can use X-factor, it's just a stupid mechanic. It's even worse than Ultras in SF4, since those "only" do 40-50% damage, and you usually have to earn them due to your opponent making a mistake. Here's a fairly extreme example, but it gets the point across:
[youtube=560,345][/youtube]
Player 2 was clearly out-played for the entire game, but because he activates XF, he kills everyone on the other guy's team with a single combo. How is that a good thing?