Quote: "Also, X10 was an absolute flop, X11 is overtaking it (something X10 never really did to X9) and game development companies are already working with X11."
Exactly. X9 is still regarded as the most stable directx platform and current game development is done on X9. TGC have made the right decision to support X9 as an established, industry standard.
Quote: "Things such as GPU instancing and Shader Model 4.0 simply CANNOT be done in X9. Shaders made in SM4.0 may be brought back to SM2.0/3.0, but they will never have the quality or speed of utilizing SM4.0 with an X10 GPU."
GPU instancing is only useful in a few cases e.g. if you wanted to have a crowd using the same character mesh in a scene.
As for X10 and shader model 4, the fact its not backwards compatible with SM2/SM3 is a real issue. The shaders used in X10 are closely tied to the engine giving the developer far more limitations for custom shaders than X9.
Also many early X10 adopters discovered many of the features have been limited in some way. For example the character dynamic shadows shown in the tech demo being projected on the environment have been cut back to only appearing directly under the model and when the player is very close to them. Also the soft particle effect is completely uncustomisable leaving only 2 stock hard coded particle effects on offer.
What X10 gained in some extra effects users can drop into their games it lost far more in providing a flexible, stable environment to work in. It took 18 months for the 1st update to come out for X10 which even gave it the same lightmapping technology present in X9.
There's a lot of very smart people on the FPSC forums. I'm quite sure if X10 was that good we would have seen more of them migrate to that version by now.
