I did a quick google on what XSG actually is. If it is this:
https://www.opal-rt.com/rt-xsg/
Then the answer is Yes, it can replace your VHDL coding. Looks like a library of blocks to use with Matlab HDL Coder.
As with most tools like this, they are fine to use until you need something thats not in the library. As soon as you need something different, you'll be back in VHDL again.
These systems are generally very good at rapid prototyping, but are not usually the best for producing optimal code. They are usually difficult to get working on custom boards to, and are aimed at dev cards.
And oh look, they also sell their own (probably expensive) custom hardware that works really well with their library.