LH is a hub airline focused on Frankfurt and Munich. It's no surprise that they don't favor subtypes that make hub bypassing possible.
You seem to be missing one thing here. Big planes are for hub2hub connections. You don't go MUC to say YYZ on A321XLR, even if it's a route within range. For a number of reasons - bigger market, many smaller destinations served from both hubs, cargo.
However, if you have XLR, and one hub at one end, you can go with serving smaller destinations at the other end. So go on hub2small model, depending on available slots etc.
I see many smaller destinations for Lufthansa that XLR will open. Middle East perhaps, even if they go mostly via hubs? India, definitely. Some cities in Russia or ex Soviet republics. Canada, USA smaller destinations perhaps. All of these would help your business case, since you don't have to pay for local partner airline anymore, or reduce their share.
Plus, there are some big cities in Germany as well, unserved on middle haul market. MUC and FRA are only hubs left. What are the opportunities for Ruhr market (be it Dusseldorf, Koln)? Berlin? Hamburg? XLR could open some thin lines from there to all areas above.
I see a lot of potential at LH as well, just need to think different. And no, for feed size LH has built over years, I don't think it would canibalize traffic via hubs. Quite opposite - take O&D for premium direct, let leisure use hubs as always.