When Horex went broke, it was acquired by a Japanese company that called itself Hosk, which continued to produce the 500 twin as a high-dollar machine. Hosk failed, and a now-defunct small bike maker called Showa (not the same as the current and healthy suspension manufacturer) bought them out and never built the machine. Showa failed and was bought out by Yamaha. When Honda produced their 750, Yamaha realized that large displacement 4-strokes would dominate the market. As a stop-gap measure they blew the dust off the old 500 design, bumped the displacement to 650, set the price point $50 higher than the Honda CB450, and rolled out the XS1 while they started up in-house 4-stroke design work. The machine proved so popular (largely because it offered the most cc's for the dollar that could be bought, despite its many vices) that Yamaha continued producing it for well over a decade.
The Brits weren't the target; they were already failing due to shoddy QA and obsolete design. Anybody who sees more of a resemblance between the XS650 and a Triumph than cylinder count and 360* crank timing needs to have his eyes checked.