A 17 year old vehicle that I have no doubt was neglected because most people are idiots and don't take care of their cars like they should is going to have issues. Both the XJ's I've purchased have had loads. I bought them knowing most of what I'd have to do and fully prepared to tackle 2 or 3 times as many problems that might pop up later.
If it ever had big tires and/or was wheeled, steering stresses may have damaged the area by the steering box rather than an impact. Steering box braces and reinforced track bar mounting plates are a very common upgrade for XJ's because that area can be a vulnerable one. Not saying that's what happened to your for sure, but it's another possibility.
How did you not notice that there was no airbag when you bought it?
I can't tell you whether to sell it or keep it. I don't know you or your XJ. All I can say is that with those unanswered questions, I might not have even bought it (I really don't like it when an owner can't even tell me why a part of the unibody is reinforced, why the engine was replaced, or why the airbag is gone). If I had bought it and was in your current situation, I'd be keeping it. Maintenance and restoration is a given with these vehicles given the way most people have [not] taken care of them up to this point. In the long run, maintenance is MUCH cheaper than car payments on overpriced, under-engineered new vehicles (which still need regular maintenance and repair mind you).