See, I'm incapable of genuinely accepting the retcon; for me, Dawn simply does not exist before the monks conjure her into existence and give Buffy's mom a brain hemorrhage. Dawn did not, in fact, ever relate to Xander like a younger sibling, and Xander did not, in fact, ever babysit for her. I know this to be truth, because I saw four years of show that says otherwise. Ergo, I fail to see the squick.
Actually I fail to see the squick regardless; Xander and Buffy didn't meet until Buffy's sophomore year of high school, so there's absolutely no way that Xander could have had any kind of formative influence on Dawn whatsoever even if she had been around for those seasons. The only thing remotely skeezy about it is the age difference, and three or four years when you're nineteen and twenty-two is just... meh?