Probably a comparison with original M3 is not fair, as this one was their first DAP, and now they seem to have a roadmap for development of portable players, as well as a clear vision of what they want to offer to each market segment.
I think there are also 2 factors, among many others, that greatly influence design decisions. The first is, in the beginning, a general principle: in portable gear, everything comes at a cost. This, applied to output power, puts also into the equation battery capacity and weight. Compared to Fiio X5 3rd gen (186g) and the original M3 (220g), 135g is really lightweight. Take also into account that balanced output gives a respectable 230mW, but taking down battery life to max. 8 hours.
The second factor I think is more important from a market perspective. If you, as manufacturer, address your product towards an audiophile user with portable use requirements in day-to-day, most of them will use IEM, that seldom require a lot of power. In this context, 130mW is probably more than enough, also for portable headphones. If battery life is near the promised (in single-ended) 13 hours, I think the whole picture will be really good.
EDIT: looking at the X7 Mark II specs, the retail module gives 150mW in single-ended (400mW in balanced)