Definitely if your service is a valuable target that hackers will spend the time to reverse engineer your client code to create custom tailored XSS attacks then protecting against Session Hijacking does seem to be pointless.
But session hijacking is considered to be a very common attack (though I can't find any real numbers anywhere, maybe it's not?), most services with low attack value will probably be better served by httpOnly cookies and csrf tokens that make worthwhile XSS attacks more time consuming then preventing XSS altogether, which is an enormous, continuous effort.
Also your implying that CSRF is hard to defend against (otherwise why do you keep running into it) but in the same breath saying that XSS is simple to defend against.
If people can't defend against CSRF (which is usually just a simple flag for most frameworks), they aren't prepared to defend against XSS which means getting into a security mindset in all things. A serverside template is not enough - XSS can manifest in headers, in clientside code, in third party code, in redirections and it is easy for a developer to mistakingly add a new attack surface.
XSS is avoidable by systematically having a framework that escapes any inputs that are run through it. (jinja2, on the server, can do this, though it defaults to not, which I wish wasn't true.) I'm not saying that XSS is much better that CSRF, really; I've seen these, too.
the point (and that of the linked article) is more that either you're not subject to XSS, in which case localStorage is strictly better than cookies (it is default-secure), or you're subject to XSS, in which case neither saves you.