This is directed at Obsidian, but it's so obvious that it probably doesn't need to be said. On the other hand, maybe other people can get the gist of why the game is the way it is?
I'm just popping in to say I support the current approach. The only problem you guys at Obsidian have right now is balance. If the system isn't perfectly balanced or put together then folks are going to assume that the whole system is whack (duh!)
Some of you worked on VtMB. That was a great game that didn't give you XP for kills or exploration, but quests. It was balanced because it was easy for the designers to project where the player would be at any point level and skill-wise. The only problem you face is that PoE is more open than VtMB or Shadowrun: Returns. So it's harder for players to feel fulfilled if the XP metrics are off.
Consider TES:Oblivion. That game had level-scaling, so that as you leveled the monsters would as well. It was panned because the players felt that progression was meaningless. I happen to agree with that crowd. Getting stronger and feeling like your achievements matter really matters.
This coupled with the common concept that combat is the focus and completely necessary for advancement is why players want to get XP for killing.
On the other hand some players just want XP for exploring.
And some want XP for hitting story beats.
This leads me to believe that really, at the heart of this, players feel they aren't getting rewarded for doing whatever it is they want to be doing in the game. Which also suggests that each player has projected their own assumptions onto how the game would feel (also very obvious). Personally I like quest based XP only systems because it naturally causes the developers to not make combat and fighting and exploration overbearing, and that allows me to trust in the design of the game, which causes me to make choices I feel my character would make, and do things while being focused on the game, instead of invisible meta-gaming ruling most of what I do.
Ok, having established that let's look at the problem areas again. I'll use an example.
Consider the beetles just outside of town. They present an obstacle that's obvious, has little purpose, and feels like a chore to deal with because they take a good while to kill and really drain resources. Compare that to systems that use quest XP only. In Shadowrun: Returns every encounter is meant to justify itself just through its existence and they all logically fit in the world. You wouldn't fight random beetles on the side of the road in Shadowrun because that'd not really make much sense. And they wouldn't be staggered about either. Instead you might have a floor filled with fire beetles that only travel in small packs, but you can clearly see them and they all make for an engaging fight. This group of beetles is around a central pillar, this group is hiding in a dark room around a corner. Each is seen as a puzzle or problem to solve, not thrown out there because this is like D&D and a lot of terrible DMs roll random encounters for no reason.
In Vampire you similarly had groups of enemies that logically existed in the locations that they're supposed to inhabit. Ghoul guards are patrolling the area, some are playing cards in a train car, some enemies might be shambling zombies hiding behind a flimsy door, some are huge werewolves you can't even kill, some are hunters that are easier to sneak around.
By marrying yourself to PoE's aesthetic you're marrying yourself to requiring a lot of those bad design choices like beetles on the side of the road that serve no purpose (and I fully admit that that statement is 100% my opinion and that plenty of folks dig that sort of thing. But it's just, ugh... When I run a D&D or Pathfinder campaign I don't throw out random encounters because at that point I have to ask myself why we all don't just play Castle Crashers or Diablo?) As this is the demo perhaps a lot of thought wasn't put into enemy placement. Maybe the encounters are there as a weak simulacrum.
If not though, then you probably need to include objective/exploration/kill-XP. On the other hand I have faith that you guys and gals can set out to do what you wanted to do. If you can make me trust in you, that I won't need to power-level to accomplish tasks, and that even without XP I'll feel like I'm gaining traction then keep going.
If not, I dunno, make a mode where every encounter gives you an amount of XP equal to abs.floor(mean party level)/X where X is an array of numbers from 10 at level 1 to maybe 20 at level cap. Extend this to exploration, where when all the black has been removed from the map FOW the player is rewarded with a similar XP value but that array starts at 2 at level 1 and extends to 5 at level cap. Basically every encounter gives you 1/10th decreasing in XP and every map explored is 1/2 XP decreasing, where 1/1 is the value required to level up.