While I understand that part of this is to make the game palatable for parents and kids looking for something that's action oriented without all the violence, it still doesn't make any kind of sense at the end of the day.
In the end, Xiaolin Showdown borrows some of the concepts of the best party games and action beat 'em ups but doesn't deliver anything compelling or exciting - even for kids. For what its worth, the game does deserve some credit for its nice presentation and for using the voice acting cast from the show. If your kids are asking for this game give it a rental first - chances are they'll get their fill in that short span of exposure to the game and will want to move onto something else.