Is it me or is the side of the lens the worst possible place to put XLR inputs? Canon's XL's have them in the back of camera. That seems to make so much more sense to me.

I think because the XL system is a shoulder-mount camera system, it makes sense to put them in the back.

Since the XF cams are handhelds, putting them on the side make sense, as people tend to brace the camera towards their bodies.

Perhaps, but the XF is not alone. The EX line also has similar XLR locations. The JVC HD/HM lines also have the inputs near the front of the camera. So does the Panny HVX200 and HPX170. And aren't Canon's own XH cameras the same layout?
I guess it's just the limitations of the small form factor; you gotta put the imputs somewhere. Most of the cams leave the back area for video/data input/outputs.

edit - Come to think of it, most all broadcast, full size cameras have front XLR inputs. That's where you plug in your shotgun mikes.