Cardale went into this a bit on Beanie & Boom's podcast. He said he hadn't shown the growth the Chargers needed to trust him as a number 2, so they went out an invested in a veteran QB. Then he came out and lit up the preseason, but the economics just didn't make sense to keep him.
He had a lot of phone calls about trying out for other teams, but life is hard as a guy on the edge of a practice squad - no job security, moving from one side of the country to the other at the drop of a hat. So playing in the XFL gives him a steady paycheck and a chance to actually play, with the idea being that he'll get a team to actually commit to him as a QB, even if as a QB 2, next season.
Was a really interesting look into the personal costs and challenges of being on the tail end of an NFL roster.