Note: This is purely a flavor review.
Xanadu refers originally to Shangdu, a palace built by Kublai Khan, one of the emperors of the Mongol Empire. As head of one of the largest empires in history Kublai Khan was quite rich and the opulence of Xanadu/Shangdu was legendary. It was this legend that caused Samuel Taylor Coleridge - high out of his mind on opium as was the fashion at the time - to compose the poem 'Kubla Khan', which is quoted in the original artwork for the card.
Later on, Xanadu was used as the name of the "stately pleasure dome" built by Charles Foster Kane, the protagonist of the famous movie 'Citizen Kane'. In the movie, Kane builds Xanadu with his massive wealth but he ends it up living in it alone, since at the end of his life he becomes lonesome and separated from the world. The original card art appears to be a reference to this - the gate in the foreground and the tall buildings in the back appear to be a clear reference to the opening of 'Citizen Kane' which also features a gate in front of the palatial and mostly empty Xanadu of Kane.
How does this all relate to Netrunner? My interpretation is that netrunner Xanadu, being a virtual resource, is a place in the Net that the runner has either found or created and that they are using as a kind of hideout. Being difficult to find makes it difficult for the Corp to identify them to activate their ICE. In other words, it is a thing that conceals the runner from the Corp, much in the same way that Tread Lightly allows the runner, by hiding and sneaking, to make finding them harder for the Corp.
The System Update quotation is from the poem 'Lamentations of Toghon Temur'. Toghon Temur was the last of the khans, and as the name suggests he laments losing the Xanadu of Kublai Khan to China, as part of the slow demise of the Mongol Empire. It is not clear to me how to work this in to my earlier interpretation (the new card art does not offer many clues) but it seems that it could be a slight reference to the official discontinuation of Android:Netrunner. Perhaps Nisei, like Toghon Temur, laments the loss of the opulent palace of their lineage.
I need more of these flavor reviews in my life.— Council