This is all why I have such a fundamental issue with a force like the RNZAF that keeps on going back to civilian airliners especially smaller narrow-bodies, for airlift. Airliners can be great for moving numbers of people form point A to point B fairly rapidly and efficiently but the capability really begins to break down when kit needs to accompany the personnel in order for them to be effective. It begins to collapse if/when outsized kit and/or vehicles are also required. From my POV as an outsider, with the RNZAF again buying civilian airliners for airlift, it looks like NZ is once again having the RNZAF replicate airlift capabilities already largely available from civilian commercial entities.
Yes don't disagree with your assessment and when the 757 replacement was being discussed on these forum pages over the last few years I personally thought that the NZDF obtaining either long range wide-bodies (eg A330/KC30 or 767 mil-variants etc) or mil-airlifters would be the better choice (and was bemused as to why the A321's were being suggested as an option by some).
However .... background documentation gives us insights into the 757 replacement decision making process/criteria and once the option "type" was narrowed down ("Civilian Medium Aircraft"), which was essentially "like-for-like" then in my mind the outcome to acquire the A321XLR makes sense.
For one, the A321 slots into existing airbase infrastructure and it also slots into efficient Air NZ A321 maintenance/parts setups and it will be able to operate to secondary airports in the Pacific (that widebody's can't unless with limitations. Plus the outrage from Opposition pollies and media that the "shiny new" RNZAF widebody's couldn't operate in it's "backyard" would have been deafening)! For a narrowbody it has exceptional range - NZ to Singapore direct and NZ to/from Antarctica and isn't constrained by safe point-of-return limits. The latter is important for joint US/NZ collaborative efforts to support Operation Deep Freeze in the Antarctic, with USAF C-17's and C-130's hauling the cargo and RNZAF 757's/A321's transporting personnel and scientists (as well as RNZAF C-130 cargo flights). The importance to the NZG, supporting the USG with Op Deep Freeze, is taken incredibly seriously at high levels (it was not impacted by the ANZUS bust up in the '80's) and this is why it is/was a significant driver in the 757 replacement project.
Reading this 757 project
documentation, in my mind (sure might be mine only ; ) and between the lines of the previous C-17 acquisition project documentation (albeit several years ago now as it is no longer online), there is a "conflict" with choosing either a civilian narrowbody, a civilian widebody and a mil-airlifter, particularly Treasury assessments, when the objective is to fund a direct replacement and not fleet expansion. The various types conflict with the military and whole-of-government tasking.
Perhaps the "easiest" away around this would be to acquire an executive jet for long range civilian/VIP tasking, thus allowing a 757 type to be replaced by a mil-airlifter or civilian widebody (A330/KC30/777 etc). Executive jets have been mooted several times, since the early 1970's to replace then then VIP Dakotas, former DefMin Wayne Mapp I think it was, suggested it was looked into in the 2010's and this current 757 replacement project (documentation) also raises the option of chartering or leasing an executive jet until the 757's are replaced. But these suggestions have been rejected by Govt (probably don't want to be seen having a "luxury" jet in a cost-of-living crisis .... but personally I think that's shortsighted, because if the RNZAF operated such a jet, which many other air forces do, perhaps they could also be tasked for advanced multi-engine training).
So IMO the NZDF are fully aware of this "conflict" and the next best option other than an executive jet type, is a civilian long range narrowbody, the A321XLR. For them = box ticked = also fulfils many roles that an executive jet cannot = move on ...
This clears the path forward, for a future project, to look at either a civilian widebody or mil-airlifter, when the NZDF grows to justify such a capability. The CDF said last December during Parliament's "Scrutiny Week" that they are planning for expansion (doubling/quadrupling), the question then becomes what triggers this and when? Alternatively this could potentially happen because of the Army's Plan ANZAC needs (once the Army finishes building up and finalising its equipment replacement programmes). I will also suggest that if the 757 replacement project adhered to its original timelines (late 2010's/early 2020's) meaning that said project had selected a replacement which would have been in service by now, that would have allowed the NZDF to progress a larger airlift capability now/soon. So "steps", the first has been taken, the next will follow ...