Been taking/abusing xanax every day for about 2 years. Have tried tapering, right down to half a pill a day and substituting valium etc. The withdrawal is SO BAD that even LOWERING the dose or changing to Valium still produces insomnia, hallucinatory anxiety, fear of impending doom, physical stiffness - the whole lot. I'm kind of worried that my best option is to weather it out and see if I can get used to lower doses and eventually phase it out altogether, but does anyone have any experience with this? I know I've earned the withdrawal from overusing, but I didn't plan on spending six months or a year trying to get off them. But the withdrawal is unbearable and at times, very frightening.

Dude, I can only imagine what you're going through right now. I would never presume to know and understand your entire experience. I have, however, been through withdrawal several times, with a few different substances at play. Sedative/hypnotic withdrawal is hard. I've definitely had this conversation with folks more than once. Opioid withdrawal is a miserable experience, like a very bad flu. Withdrawal from sedative/hypnotics, including Alcohol, is closer to being in an actual living nightmare. You know something terrible is around the corner, it's going to kill you, tear you apart, eat your organs and then drag you down to hell.
Quitting Alcohol was a very hard experience for me. I was drinking ~1 liter of hard liquor a day when I was in school. I ended up going to the hospital after a few days, as I was no longer capable of caring for myself in the state I was in. You have this option too. In fact, this is what I would recommend.
You did not "earn" anything. No need to drag yourself further down my friend. We are all guilty of wanting to feel differently than we do sometimes. Eating, gambling, fucking... pick your vice. People don't always do what is best for them. Some people think murdering their wife and feeding the kids to crocodiles is a more sensible action than a divorce. People are fucked so take stock of what you have going for you.
You have made the decision to stop using. This is huge. The quest for sobriety -> contentment is arduous, interminable, painful, but above all else, the quest is
personal. This is a huge mountain to climb. What really sucks is at the end, when you finally feel comfortable and you have some semblance of control, people will say "well, you should've just done that in the first place". You have to be able to find pride in yourself, otherwise it will never work. Find pride in your sobriety for now.