The CSS3 spec for object-fit is here: http://dev.w3.org/csswg/css-images-3/#the-object-fit This property is supposed to apply to all "replaced elements". Surely xul:image is a replaced element. It is replaced by (potentially) a raster image, just as an HTML <img> is. Therefore it should be supported by these CSS properties. Bug #624647 claimed to implement these CSS properties but it has not done so for XUL elements. They need to be implemented for XUL elements.
Thanks for filing. Bug 1094609 covers this already -- duping to that bug. (For background: as noted in that bug, <xul:image> and <svg:image> use a different not-specific-to-replaced-elements image-drawing codepath, which is why they weren't fixed by the patches in bug 624647.)