He's right you know Sean!
Who?

just been thinking about the defraction of light caused by dirt. Wouldn't water (expelled by the washers) sitting on the light cause the same problem?
To a certain extent, yes. But the purity of water from the washers (hopefully a mix of water and specialist screenwash with surfactants) should give less defraction than the wide range of contaminents that gather on the outer lens, such as salt, grit, mud, oil, cow poo, squashed midgies, etc, etc.
Or maybe the wind is enough to clear enough water.
Quite! How many motorcylists have dinky little wipers on their visors??

perhaps all xenons should have volvo style headlight wipers too......??
In an ideal world, with glass outer lenses, yes. But two crucial reasons why not - firstly, headlamp outer lenses are made from polycarbonate, or similar substances, and any mechanical wiping system would rapidly ruin the outer lens, with scoring, making the problem even worse. Secondly, even if the blades were somehow made soft enough when new not to do any damage, owners would not change the little dinky wipers, which would merely snowball the scoring effect.
Headlamp washers are not the perfect solution, but they are the best for the prevailing circumstances. Indeed, if you read the owners manual on cars with HIDs, there are usually two statements, don't use anything hard or harsh when cleaning the headlamps (to prevent scratching), and secondly, don't rely on the washers alone to remove all of the traffic film, or words to that effect.
Rgds