While it's true that originally X was network transparent, this hasn't truly been the case for a long time now. All modern applications (including the ones you've listed) render the whole window locally for performance reasons. This does not work over the network. Instead, xorg will transmit a picture of the window, giving you an in many ways worse version of VNC. The only difference is the level of integration with other programs like SSH.
This makes no sense. The community of people working on Xorg aren't gone, they're just working on wayland now. Wayland was designed by long time Xorg maintainers. This "hostile takeover" narrative is complete FUD.
I think the reverse definition is just as silly... Calling a JPEG parser vulnerability an RCE just because some online service is using it in a way that can be exploited remotely. By that definition, any bug is an RCE, since I can just set up a web server to run that program.
I think a better way of looking at it is that it's an ACE Vulnerability in the e.g. JPEG parser that causes an RCE in the Online Service.
Or, in this case, an ACE vulnerability in SQLite that causes an RCE in Chromium.
What are your thoughts on implementing something more general like linux's FUSE[1] instead? A general Virtual Filesystem driver in Windows could be used for a wide range of things and means you don't just have a single-purpose driver sitting around.