Hello Dan,
It could be. However, every aligment procedure in production is usually a significant cost contributor. Even in China.
IIUC it outputs to TMR0 reg which indeed isn't so cool. But look at Figure 6-6. Maybe there is a way to pipe it through the WDT path. Unless PSA turns off the WDT Time-Out mux or that signal cannot go anywhere. This doesn't seem to be a very versatile uC. Or as they say in the UK, it doesn't float my boat.
If it can't do all that maybe there is a better uC for X-10 than this one, at similar cost. Quite frankly it is the first uC I come across that seems to be unable to do PWM. Even ye olde C51 could do that.
Regards, Joerg