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"...it is only a few inches higher than the current XC70."
Try 7 inches higher. That's a lot. Granted, it's still 3 inches shorter than an Explorer but what does it have that the XC doesn't? All I see is a 3rd row of foward-facing seats. So, it's aimed at families that want more passenger capacity and vehicle height/mass (for perceived safety). Other than that, it competes directly with the XC70. Why keep the XC70?
Meanwhile, it doesn't appear as off-road worthy as many other SUVs--no low range, no full skid plates, and I'll bet it even comes with a temporary spare like the XC70. Looks like a nice car but it's clearly just an attempt to cash in on the SUV look.
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