X-Rounders are a regression of the human brain in-universe, leading to more instinctual, more impulsive, and more violent actions and thoughts. The novel adaption gives more insight into this as well, including when Asemu wears the X-Rounder pilot helmet and in the novel he sees a vision of "feral" humans acting out in random violence and destroying everything. This explains quite a few logical failures, plain incompetency, reckless actions, and other issues some have with the narratives. These include:
Why the Vagan army is so bloodthirsty, being made up of mostly X-Rounders and those wearing the X-Rounder helmets. Especially the higher-ups like Desil, Magician's 8, and Zanald, who even looks like a gorilla. Some however, like Zeheart, seem to be able to keep it under control.
Just WHY the X-Rounder helmet causes brain damage, it can easily be thought that it purposely damages other parts of the brain to make the X-Region stronger. So, the Vagan military are wearing actual Idiot Helmets.
Flit's genocidal thoughts against the Vagans.
Yurin's reckless decision to go with Desil and the other Vagans with hopes that if she goes with them she'll run into Flit again.
Kio not using a couple of basic piloting skills to evade himself and the AGE-3O being captured by Zanald.
Kio's reckless action of handing the AGE Device over to Ezelcant just for a few weeks worth of what were basically painkillers for Lu, who tragically ends up dying in her sleep anyway due to overexertion during the time she spent without symptoms.
Ezelcant's plan to build a Social Darwinist utopia, especially since such a plan came to fruition not long after his son's death.
We also have an example of what kind of people Ezelcant would create with his tactics. Flit.
Zeheart bringing Girard Spriggan into the battle, knowing full well how unhinged she can get in the battlefield.
This would also explain why Asemu, the only main character that ISN'T an X-rounder is frequently the only person that is able to act without his emotions clouding his judgement or otherwise making poor decisions. Indeed in the final arc once he's grown past his teenager rebellion stage he's pretty much the only character that doesn't anything mind boggling stupid at least once.
The Visidian Space Pirates pilot altered versions of suits such as the G-Exes, G-Bouncer, and recently the Dark Hound which is based on AGE-2 rather than develop original suits. Now think about what "piracy" means in real life...
Although a more likely (and still fridgey) explanation is the fact that Captain "Ash" was mentored by the pilot of the G-Exes and G-Bouncer. Aww.
But Visidian had theirs based on Woolf's suits way before Asemu became their leader.
Desil is one of the most improbably young villains in the series, a pilot and commander at the tender age of seven. But his brattiness hampers the Vagan cause: He calls off a sure victory just because he's bored with how easily they're beating the Feddies, and then he misuses the valuable X-Rounder that Vagan just recruited by treating her as a toy in battle, which results in her death. When Generation 2 rolls around, though, he lacks any authority at all—he's just a regular MS pilot who happens to be Zeheart's brother. Ezelcant apparently learned a lesson about that one.
Asemu's decision to paint the Dark Hound Red and Black (his mentor's least favorite colors) because those that knew him would never think he'd do that.
All 3 protagonists have varying viewpoints on the conflict. And all of them stem from the first Vegan they really get to know on a personal level. Flit meets Desil, who's a psychotic monster who kills a close friend, leading him to believe that Vegans are all monsters that will take away everything precious to him if he doesn't kill them all. Asemu on the other hand meets Zeheart who is a worthy and fair opponent, who showed him he could befriend him, and was only on the other side due to circumstances. This causes Asemu to take a strong but impersonal stance in the war. He really doesn't have anything against the Vegans, and would be open to peace but won't hesitate to kill them. Kio meanwhile meets Lu and Deen, not soldiers (at first) and sees them suffering and therefore believes that Vegans are all victims that deserve to be saved, and he is really unable to wrap his head about why other Vegans are evil (when Zeheart tricks them with the laser and blows a bunch of guys up he is literally unable to understand why). Of the 3 Asemu's view is the one that makes the most sense, while Flit and Kio come off as extremely close minded and irrational for different reasons (Flit for thinking all Vegans are like Desil, and Kio for thinking all Vegans are all Lu and Deen. Obviously they aren't. They are good and bad Vegans). Because Asemu isn't an X-Rounder which powers apparantly cloud judgement.
Between the Second and Third Generations, Vagan sleeper cells were hidden on Earth, interacting among the Earth-faring populace like just any other person. The inevitable fall-out is unimaginable and unfortunate, especially if the Vagans found themselves making friends or even establishing families with those from Earth prior to the invasion.
If you've watched Episode 39, you know that Ezelcant wants to build a Social Darwinist utopia on Earth by destroying colonies (both Earth and Vagan) and exposing others to extreme conditions. Looking back at how many of his people suffer from widespread poverty and disease, is it really because Vagan lacks resources to produce necessities such as effective medicine? Or is it because Ezelcant is holding back social development on purpose to kill those who he considers weak faster?
Once Kio starts taking plays from the books of Kira Yamato, the writers address the issue of leaving pilots incapacitated in the middle of a battlefield by having him block a few killing shots from his own side using the Gundam FX's funnels. Okay. What happens when his attention is drawn elsewhere, which happens pretty thoroughly in the next two episodes?
Shanalua Mullen has a young sister with an unspecified, but very serious illness that keeps her hospitalized and requires very expensive treatment. The payments are the sole reason for Shanalua's spying gig for Vagan... but it doesn't take long before she is exposed and subsequently killed in battle, reaching for the Fatal Family Photo she kept in her Clanche's cockpit. So... what happens to her little sister, now totally alone in the world because her sister is dead as a traitor? The show has not, to date, addressed this loose end.
It is mentioned in the PSP game that the treatment is paid for eventually by an unknown source.
Aaron Simmons, the commander of the strategic Luna Base, defects to the Vagans in G3 and hands the base over to their control while retaining his position. In episode 43, we find out it's because he's a Dirty Coward whose primary motivation is not wanting to die. So... why in the world would he join the military when there's a war that's lasted 50+ years? That would make some sense in G1, but at this point it's obvious to anyone that joining the military is, in fact, A DANGEROUS JOB.
Ezelcant claims that history proves that mankind will never be able to overcome the endless chain of violence they've been subject to throughout their history, but humanity did enter a legitimate era of peace that the Vagan shattered.
It wasn't quite legitimate. The reason the Vagan broke the peace was due to the willful neglect and cover-up by the Feddies, which bred a lot of resentment in them, enough to declare war once they got their hands on the EXA-DB fragment. Technically there was peace, but Ezelcant probably views the Federation's peace as built on rotten foundations and therefore not worth preserving.