Yup, that Xeon is actually cheaper than an i7 for the same performance.
What you lose is the integrated graphics (maybe you don't care)? Though Quicksync is sometimes handy for much faster video encoding (some complain at the lower quality output though). You can read up on it here:
http://www.intel.com/content/www/us/en/architecture-and-technology/quick-sync-video/quick-sync-video-general.html
You also lose the ability overclock, which can push a i7 4770K (you need the "K" version to overclock) a chunk faster than the Xeon.
Yea i'm also adding an R9 280x with that so that should be good for sony vegas?
Whether that makes the i7 worth the extra $$s is up to you.