XMMP is as federated as Matrix is. Users connected to a particular service can easily communicate with users connected to other services. And that happens way more privately than with the Matrix protocol which leaks way more metadata.
Matrix is no different by the way, which is NOT distributed, it’s federated. And both XMMP and Matrix, can be de-centralized, as long as you self host. But if you have a Matrix account, or an /e/ one for that matter, that’s not de-centralized at all, you are using a central service, wherever it comes from. It becomes only de-centralized if you self host, be it XMPP or Matrix. But not all of us can self host, 
BTW hosting a Matrix service, I’ve read, requires much more computing resources, besides the fact it leaks way more metadata, particularly when you interact with people using other Matrix services, and even further when using groups. So hosting XMMP with omemo support is lighter, and depending on your client, even video calls are omemo encrypted (they are about to be on Dine, and they already are on conversations), whereas the video calls are not e2ee encrypted on Matrix clients, they use the webRTC encryption, provided by jitsi, which is used as a plugin on element, and moreover not all Matrix clients support e2ee, neither are as polished as the Element client, which is sadly an electron client for the desktop, which won’t change.
So again, if /e/ provides XMPP services, that would be just great, and though it’s impossible not to have impact on storage and computing resources, those wouldn’t compared to what hosting Matrix requires.
So I still hope the /e/ foundation gives some thought to this request… The same storage limits already in place might apply in conjunction with the XMMP service, for free accounts, and the different payed plans. Or perhaps there could be a bit of increase to the limits for all accounts types. But for sure, it would be another step forward towards privacy and security, making it easy to adopt, if for example conversations is there by default on the /e/ phones. People would be ready to go and use XMMP without burden.