I really can’t figure out why this episode was so critically acclaimed, or so I’d heard it was at the time it originally aired. Is it because it showed a grim future for humanity and actually shoed Earth being destroyed? Why? Right off the bat we knew that it’d have to be one of the biggest reset episodes ever seen in Star Trek, being matched only by the VOY episode it rehashes – Year of Hell. So what’s so great about reset button episodes?
From the start of the Xindi Arc you know that Earth isn't going to be destroyed because Earth exists in the future series of Star Trek so that point is somewhat moot. Most of the Xindi drama came from the Enterprise crew having to tackle a bigger challenge and adapt themselves to an unfriendly environment.
Twilight is essentially "The Bad Ending" to the third season of Enterprise. Naturally, you couldn't end the season with Earth getting destroyed because that would unravel everything -- but with this episode, you not only got to see this idea contemplated, but you also go to see it taken pretty far. Humanity was really facing extinction at that point.
While this might not seem like the biggest deal, consider the Dominion War. Did we ever get to see an episode in which the Dominion won the war and the Federation of Planets were disbanded into individual pieces of property of the Dominion? Glimpses of a dark world where even humans and Vulcans are forced to worship Vortas and Founders by penalty of death? No, we didn't. The closest we got was an episode where Bashir and a few other genetically engineered geniuses put together a theory that the Federation's victory is mathematically impossible...but by the end of the episode they realized it was a bogus theory. (EDIT: Unless I'm forgetting an episode.)
Twilight was special because it let us see "The Bad Ending" without preventing the heroes to eventually create "The Happy Ending." It's not all that often you get both.