Well, frankly I think Xue's fanaticism could use some counterpoints.  

There are some real advantages to using weapons

1.  It extends your reach.  Reach is a terribly important thing in 
arms-length combat.  Often a critical edge.  Since women have a reach
disadvantage, this is why most historical female warriours used some
kind of long stabbing weapon like a spear, or a missile weapon.  

2.  It multiplies your force.  No matter how much damage you can do
with a punch, you can do more with a swung weapon, and sharpness 
multiplies your damage.  

You have presented Xue's opinions as a matter of unassailable fact.  
This is particularly absurd when applied to Ryoga who doesn't limit
his options in the least by adding weapons to his repertoire.  To the
contrary, Ryoga has the best of both worlds by using weapons without
being dependant on them.  Mousse _has_ compensated for the limitations
of weapons by having an unending supply and variety of them.  It's also 
absurd to suggest that Mousse would be helpless if you were to break his 
weapon or that he is limited to only a few moves.  

You even had Cologne sputter ineffectually.  Surely that old and clever
broad can either argue her case for her methods intelligently, or simply 
dismiss him as an ignorant and arrogant fool which is what,
frankly, he struck me as close to being.  The suggestion that the men
have come up with all the good combat techniques which have then been
copied by the women is particularly deserving of her contempt.  He 
certainly wasn't being a very good teacher when his only approach was to 
tell Mousse "My way or
the highway, bub."  

There is one other small problem I have.  As I recall, Shampoo
didn't defeat Mousse with a weapon.  She just kicked him in the face.
Maybe I misremember...

As far as the social setup goes, this is a creative way of letting
the outsider rule apply to Mousse.  However it would mean that the
outsider rule also applies to Cologne and having been defeated by
Cologne, Shampoo would be bound to try to kill her grandmother.
I'm not sure that's how it's supposed to work.