Yeah, the larger Subies are not the best at mileage. My Legacy (the big wagon, but not as sexy as a Legacy Outback) got 24 mpg or so on a good day. Then the engine kinda went toes-up and i was getting 17 mpg!!
A new engine was tooooo expensive, so I traded it in on my Impreza. But I was pretty tempted by the Element and the Scion XB. I was looking for room for the dog/kid/bikes/junk.
My concern with the Element was that at the time it wasn't available with stick and all wheel drive. The dealer tried to convince me I'd like an automatic just fine, but nope. I was also a little worried about getting SKnot in and out of the car through the overlapping doors, and the stability of the "B" pillar. (now that he's big enough to sit in the front seat that's no longer an issue)
"If Americans want to live the American Dream, they should go to Denmark." - Richard Wilkinson