Xiangyang is not a suitable capital for China and was never a suitable capital, even during the Southern Dynasties where Jingzhou/Jiangling, a city on the Yangtze directly to the south, tended to be the alternate center of power to Jiankang.
1) Xiangyang might be an important military point but it is not an important economic point. Goods shipped across water are generally cheaper than those shipped across land, and Guanzhong merchants would have used the Wei River to access the commercial hubs of the Yellow River and through the Grand Canal to Jiangnan, rather than some overland route to Xiangyang (whose military importance comes from it being one of the northernmost non-canal access points to the Yangtze basin).
This is important because economic power tends to create political power of its own - a capital at Xiangyang would create rival centers of power at Kaifeng and Jiangnan, dangerous given the economic strength of the latter two.
2) This is true, but in and of itself is not a reason to create a capital there. Kaifeng, Luoyang and all the various other capitals were also easily supplied. Xiangyang also tends to rely heavily on Han River supply, unlike the aforementioned cities which have large agricultural hinterlands - and once that is blocked (like Kublai Khan building his own Han River navy and denying access to Song reinforcements through counterweight trebuchets), Xiangyang would be in trouble.
3) Easily defended terrain tends not to be accessible terrain, which is always troubling for an imperial capital. It segregates the country and creates alternate centers of power, especially in distant cities that are home to rich and powerful people.
Guanzhong was a suitable capital initially because the economic power was concentrated either there or in the North China Plain, which was accessible through the Yellow River; its decline was not only the result of deforestation but also because economic power had shifted increasingly to cities like Jiankang and Yangzhou, whose remoteness from Chang'an created incentives for autonomy - dangerous especially when you rely on said region for tax and supply (remember that the powerful 10 Kingdoms states of Wu and Southern Tang had their bases in the Yangzhou/Jiankang region).
Kaifeng was much more connected to Jiangnan, both in terms of sheer distance and also through the Grand Canal, and therefore it was a more effective point for exerting control over that lucrative region. In addition, by the time of the 5 Dynasties and 10 Kingdoms the city had already been an imperial capital several times over (of course, the dynasties were brief) as well as a jiedushi capital for much longer, so all the infrastructure was in place, unlike Xiangyang which was not a capital (again, unlike Jiangling, which was the capital of Nanping).
The indefensibility of Kaifeng is an issue, but it's not a tremendous one - strongpoints along the route from Beijing could delay nomadic advances long enough for an effective military response. The problem was Song inferiority due to its military system, and even that was rectified through diplomacy and tribute with the Liao. Without the Song foreign policy debacle in the Jin alliance, Kaifeng would have been perfectly OK as a Song capital.